Correlation Between Anhui Deli and Shanghai Construction
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By analyzing existing cross correlation between Anhui Deli Household and Shanghai Construction Group, you can compare the effects of market volatilities on Anhui Deli and Shanghai Construction 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 Anhui Deli with a short position of Shanghai Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Deli and Shanghai Construction.
Diversification Opportunities for Anhui Deli and Shanghai Construction
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Anhui and Shanghai is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Deli Household and Shanghai Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Construction and Anhui Deli 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 Anhui Deli Household are associated (or correlated) with Shanghai Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Construction has no effect on the direction of Anhui Deli i.e., Anhui Deli and Shanghai Construction go up and down completely randomly.
Pair Corralation between Anhui Deli and Shanghai Construction
Assuming the 90 days trading horizon Anhui Deli is expected to generate 1.21 times less return on investment than Shanghai Construction. But when comparing it to its historical volatility, Anhui Deli Household is 1.03 times less risky than Shanghai Construction. It trades about 0.18 of its potential returns per unit of risk. Shanghai Construction Group is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 193.00 in Shanghai Construction Group on September 15, 2024 and sell it today you would earn a total of 87.00 from holding Shanghai Construction Group or generate 45.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Anhui Deli Household vs. Shanghai Construction Group
Performance |
Timeline |
Anhui Deli Household |
Shanghai Construction |
Anhui Deli and Shanghai Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Anhui Deli and Shanghai Construction
The main advantage of trading using opposite Anhui Deli and Shanghai Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Deli position performs unexpectedly, Shanghai Construction 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 Shanghai Construction will offset losses from the drop in Shanghai Construction's long position.Anhui Deli vs. Industrial and Commercial | Anhui Deli vs. China Construction Bank | Anhui Deli vs. Agricultural Bank of | Anhui Deli vs. Bank of China |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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