Correlation Between ENN Energy and Anhui Conch
Can any of the company-specific risk be diversified away by investing in both ENN Energy and Anhui Conch at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ENN Energy and Anhui Conch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENN Energy Holdings and Anhui Conch Cement, you can compare the effects of market volatilities on ENN Energy and Anhui Conch and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ENN Energy with a short position of Anhui Conch. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENN Energy and Anhui Conch.
Diversification Opportunities for ENN Energy and Anhui Conch
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ENN and Anhui is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding ENN Energy Holdings and Anhui Conch Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Conch Cement and ENN Energy is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ENN Energy Holdings are associated (or correlated) with Anhui Conch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Conch Cement has no effect on the direction of ENN Energy i.e., ENN Energy and Anhui Conch go up and down completely randomly.
Pair Corralation between ENN Energy and Anhui Conch
Assuming the 90 days horizon ENN Energy is expected to generate 14.35 times less return on investment than Anhui Conch. In addition to that, ENN Energy is 1.08 times more volatile than Anhui Conch Cement. It trades about 0.0 of its total potential returns per unit of risk. Anhui Conch Cement is currently generating about 0.07 per unit of volatility. If you would invest 946.00 in Anhui Conch Cement on August 28, 2024 and sell it today you would earn a total of 378.00 from holding Anhui Conch Cement or generate 39.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENN Energy Holdings vs. Anhui Conch Cement
Performance |
| Timeline |
| ENN Energy Holdings |
| Anhui Conch Cement |
ENN Energy and Anhui Conch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENN Energy and Anhui Conch
The main advantage of trading using opposite ENN Energy and Anhui Conch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENN Energy position performs unexpectedly, Anhui Conch can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Anhui Conch will offset losses from the drop in Anhui Conch's long position.| ENN Energy vs. NewJersey Resources | ENN Energy vs. Atmos Energy | ENN Energy vs. UGI Corporation | ENN Energy vs. Chesapeake Utilities |
| Anhui Conch vs. Buzzi Unicem SpA | Anhui Conch vs. Wienerberger Baustoffindustrie | Anhui Conch vs. Lafargeholcim Ltd ADR | Anhui Conch vs. HeidelbergCement AG ADR |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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