Correlation Between China Greatwall and Fujian Anjoy
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By analyzing existing cross correlation between China Greatwall Computer and Fujian Anjoy Foods, you can compare the effects of market volatilities on China Greatwall and Fujian Anjoy 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 China Greatwall with a short position of Fujian Anjoy. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Greatwall and Fujian Anjoy.
Diversification Opportunities for China Greatwall and Fujian Anjoy
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Fujian is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding China Greatwall Computer and Fujian Anjoy Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Anjoy Foods and China Greatwall 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 China Greatwall Computer are associated (or correlated) with Fujian Anjoy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Anjoy Foods has no effect on the direction of China Greatwall i.e., China Greatwall and Fujian Anjoy go up and down completely randomly.
Pair Corralation between China Greatwall and Fujian Anjoy
Assuming the 90 days trading horizon China Greatwall Computer is expected to generate 2.18 times more return on investment than Fujian Anjoy. However, China Greatwall is 2.18 times more volatile than Fujian Anjoy Foods. It trades about 0.15 of its potential returns per unit of risk. Fujian Anjoy Foods is currently generating about -0.03 per unit of risk. If you would invest 1,139 in China Greatwall Computer on September 25, 2024 and sell it today you would earn a total of 400.00 from holding China Greatwall Computer or generate 35.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
China Greatwall Computer vs. Fujian Anjoy Foods
Performance |
Timeline |
China Greatwall Computer |
Fujian Anjoy Foods |
China Greatwall and Fujian Anjoy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Greatwall and Fujian Anjoy
The main advantage of trading using opposite China Greatwall and Fujian Anjoy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Greatwall position performs unexpectedly, Fujian Anjoy 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 Fujian Anjoy will offset losses from the drop in Fujian Anjoy's long position.China Greatwall vs. Fujian Anjoy Foods | China Greatwall vs. Qingdao Foods Co | China Greatwall vs. Northking Information Technology | China Greatwall vs. Youyou Foods Co |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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