Correlation Between MAANSHAN IRON and ANGANG STEEL
Can any of the company-specific risk be diversified away by investing in both MAANSHAN IRON and ANGANG STEEL 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 MAANSHAN IRON and ANGANG STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAANSHAN IRON H and ANGANG STEEL H , you can compare the effects of market volatilities on MAANSHAN IRON and ANGANG STEEL 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 MAANSHAN IRON with a short position of ANGANG STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAANSHAN IRON and ANGANG STEEL.
Diversification Opportunities for MAANSHAN IRON and ANGANG STEEL
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between MAANSHAN and ANGANG is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding MAANSHAN IRON H and ANGANG STEEL H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGANG STEEL H and MAANSHAN IRON 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 MAANSHAN IRON H are associated (or correlated) with ANGANG STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGANG STEEL H has no effect on the direction of MAANSHAN IRON i.e., MAANSHAN IRON and ANGANG STEEL go up and down completely randomly.
Pair Corralation between MAANSHAN IRON and ANGANG STEEL
Assuming the 90 days trading horizon MAANSHAN IRON H is expected to generate 1.38 times more return on investment than ANGANG STEEL. However, MAANSHAN IRON is 1.38 times more volatile than ANGANG STEEL H . It trades about 0.23 of its potential returns per unit of risk. ANGANG STEEL H is currently generating about 0.16 per unit of risk. If you would invest 16.00 in MAANSHAN IRON H on November 4, 2024 and sell it today you would earn a total of 4.00 from holding MAANSHAN IRON H or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAANSHAN IRON H vs. ANGANG STEEL H
Performance |
| Timeline |
| MAANSHAN IRON H |
| ANGANG STEEL H |
MAANSHAN IRON and ANGANG STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAANSHAN IRON and ANGANG STEEL
The main advantage of trading using opposite MAANSHAN IRON and ANGANG STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAANSHAN IRON position performs unexpectedly, ANGANG STEEL 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 ANGANG STEEL will offset losses from the drop in ANGANG STEEL's long position.| MAANSHAN IRON vs. CVS Health | MAANSHAN IRON vs. EPSILON HEALTHCARE LTD | MAANSHAN IRON vs. Penta Ocean Construction Co | MAANSHAN IRON vs. North American Construction |
| ANGANG STEEL vs. Apple Inc | ANGANG STEEL vs. Apple Inc | ANGANG STEEL vs. Apple Inc | ANGANG STEEL vs. Apple Inc |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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