Correlation Between Anhui Conch and Lotus Health
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By analyzing existing cross correlation between Anhui Conch Cement and Lotus Health Group, you can compare the effects of market volatilities on Anhui Conch and Lotus Health 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 Conch with a short position of Lotus Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Conch and Lotus Health.
Diversification Opportunities for Anhui Conch and Lotus Health
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Anhui and Lotus is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Conch Cement and Lotus Health Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Health Group and Anhui Conch 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 Conch Cement are associated (or correlated) with Lotus Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Health Group has no effect on the direction of Anhui Conch i.e., Anhui Conch and Lotus Health go up and down completely randomly.
Pair Corralation between Anhui Conch and Lotus Health
Assuming the 90 days trading horizon Anhui Conch is expected to generate 2.7 times less return on investment than Lotus Health. But when comparing it to its historical volatility, Anhui Conch Cement is 1.52 times less risky than Lotus Health. It trades about 0.19 of its potential returns per unit of risk. Lotus Health Group is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 302.00 in Lotus Health Group on September 13, 2024 and sell it today you would earn a total of 278.00 from holding Lotus Health Group or generate 92.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.28% |
Values | Daily Returns |
Anhui Conch Cement vs. Lotus Health Group
Performance |
Timeline |
Anhui Conch Cement |
Lotus Health Group |
Anhui Conch and Lotus Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Anhui Conch and Lotus Health
The main advantage of trading using opposite Anhui Conch and Lotus Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Conch position performs unexpectedly, Lotus Health 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 Lotus Health will offset losses from the drop in Lotus Health's long position.Anhui Conch vs. Lotus Health Group | Anhui Conch vs. Jiugui Liquor Co | Anhui Conch vs. Hubei Xingfa Chemicals | Anhui Conch vs. Andon Health 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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