Correlation Between COL Digital and Anji Foodstuff

Can any of the company-specific risk be diversified away by investing in both COL Digital and Anji Foodstuff 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 COL Digital and Anji Foodstuff into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between COL Digital Publishing and Anji Foodstuff Co, you can compare the effects of market volatilities on COL Digital and Anji Foodstuff 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 COL Digital with a short position of Anji Foodstuff. Check out your portfolio center. Please also check ongoing floating volatility patterns of COL Digital and Anji Foodstuff.

Diversification Opportunities for COL Digital and Anji Foodstuff

0.42

Correlation Coefficient

COL Digital  Anji Foodstuff

Very weak diversification

The 3 months correlation between COL and Anji is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding COL Digital Publishing and Anji Foodstuff Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anji Foodstuff and COL Digital 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 COL Digital Publishing are associated (or correlated) with Anji Foodstuff. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anji Foodstuff has no effect on the direction of COL Digital i.e., COL Digital and Anji Foodstuff go up and down completely randomly.

Pair Corralation between COL Digital and Anji Foodstuff

Assuming the 90 days trading horizon COL Digital Publishing is expected to under-perform the Anji Foodstuff. In addition to that, COL Digital is 1.5 times more volatile than Anji Foodstuff Co. It trades about -0.04 of its total potential returns per unit of risk. Anji Foodstuff Co is currently generating about 0.01 per unit of volatility. If you would invest  830.00  in Anji Foodstuff Co on December 30, 2024 and sell it today you would earn a total of  3.00  from holding Anji Foodstuff Co or generate 0.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

COL Digital Publishing  vs.  Anji Foodstuff Co

COL Digital Publishing

Risk-Adjusted Performance

Very Weak

Over the last 90 days COL Digital Publishing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Anji Foodstuff

Risk-Adjusted Performance

Weak

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

Pair Trading with COL Digital and Anji Foodstuff

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

The idea behind COL Digital Publishing and Anji Foodstuff Co 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.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.