Correlation Between Yunnan Copper and Anhui Liuguo

Can any of the company-specific risk be diversified away by investing in both Yunnan Copper and Anhui Liuguo 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 Yunnan Copper and Anhui Liuguo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Yunnan Copper Co and Anhui Liuguo Chemical, you can compare the effects of market volatilities on Yunnan Copper and Anhui Liuguo 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 Yunnan Copper with a short position of Anhui Liuguo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunnan Copper and Anhui Liuguo.

Diversification Opportunities for Yunnan Copper and Anhui Liuguo

0.0

Correlation Coefficient

Yunnan Copper  Anhui Liuguo

Pay attention - limited upside

The 3 months correlation between Yunnan and Anhui is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Yunnan Copper Co and Anhui Liuguo Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Liuguo Chemical and Yunnan Copper 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 Yunnan Copper Co are associated (or correlated) with Anhui Liuguo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Liuguo Chemical has no effect on the direction of Yunnan Copper i.e., Yunnan Copper and Anhui Liuguo go up and down completely randomly.

Pair Corralation between Yunnan Copper and Anhui Liuguo

If you would invest (100.00) in Anhui Liuguo Chemical on October 7, 2024 and sell it today you would earn a total of  100.00  from holding Anhui Liuguo Chemical or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Yunnan Copper Co  vs.  Anhui Liuguo Chemical

Yunnan Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yunnan Copper Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Anhui Liuguo Chemical

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Anhui Liuguo Chemical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Anhui Liuguo is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Yunnan Copper and Anhui Liuguo

The main advantage of trading using opposite Yunnan Copper and Anhui Liuguo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunnan Copper position performs unexpectedly, Anhui Liuguo 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 Liuguo will offset losses from the drop in Anhui Liuguo's long position.

The idea behind Yunnan Copper Co and Anhui Liuguo Chemical pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.