Correlation Between Anhui Huilong and Semiconductor Manufacturing

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Anhui Huilong and Semiconductor Manufacturing 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 Anhui Huilong and Semiconductor Manufacturing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anhui Huilong Agricultural and Semiconductor Manufacturing Intl, you can compare the effects of market volatilities on Anhui Huilong and Semiconductor Manufacturing 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 Huilong with a short position of Semiconductor Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Huilong and Semiconductor Manufacturing.

Diversification Opportunities for Anhui Huilong and Semiconductor Manufacturing

0.17
  Correlation Coefficient

Average diversification

The 3 months correlation between Anhui and Semiconductor is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Huilong Agricultural and Semiconductor Manufacturing In in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semiconductor Manufacturing and Anhui Huilong 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 Huilong Agricultural are associated (or correlated) with Semiconductor Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semiconductor Manufacturing has no effect on the direction of Anhui Huilong i.e., Anhui Huilong and Semiconductor Manufacturing go up and down completely randomly.

Pair Corralation between Anhui Huilong and Semiconductor Manufacturing

Assuming the 90 days trading horizon Anhui Huilong Agricultural is expected to under-perform the Semiconductor Manufacturing. But the stock apears to be less risky and, when comparing its historical volatility, Anhui Huilong Agricultural is 1.85 times less risky than Semiconductor Manufacturing. The stock trades about -0.43 of its potential returns per unit of risk. The Semiconductor Manufacturing Intl is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  8,678  in Semiconductor Manufacturing Intl on October 10, 2024 and sell it today you would earn a total of  382.00  from holding Semiconductor Manufacturing Intl or generate 4.4% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Anhui Huilong Agricultural  vs.  Semiconductor Manufacturing In

 Performance 
       Timeline  
Anhui Huilong Agricu 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Anhui Huilong Agricultural are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Anhui Huilong is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Semiconductor Manufacturing 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Semiconductor Manufacturing Intl are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Semiconductor Manufacturing sustained solid returns over the last few months and may actually be approaching a breakup point.

Anhui Huilong and Semiconductor Manufacturing Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Anhui Huilong and Semiconductor Manufacturing

The main advantage of trading using opposite Anhui Huilong and Semiconductor Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Huilong position performs unexpectedly, Semiconductor Manufacturing 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 Semiconductor Manufacturing will offset losses from the drop in Semiconductor Manufacturing's long position.
The idea behind Anhui Huilong Agricultural and Semiconductor Manufacturing Intl 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

Other Complementary Tools

Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity