Correlation Between Anhui Xinhua and China Publishing

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

Diversification Opportunities for Anhui Xinhua and China Publishing

0.04
  Correlation Coefficient

Significant diversification

The 3 months correlation between Anhui and China is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Xinhua Media and China Publishing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Publishing Media and Anhui Xinhua 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 Xinhua Media are associated (or correlated) with China Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Publishing Media has no effect on the direction of Anhui Xinhua i.e., Anhui Xinhua and China Publishing go up and down completely randomly.

Pair Corralation between Anhui Xinhua and China Publishing

Assuming the 90 days trading horizon Anhui Xinhua Media is expected to generate 0.79 times more return on investment than China Publishing. However, Anhui Xinhua Media is 1.26 times less risky than China Publishing. It trades about 0.0 of its potential returns per unit of risk. China Publishing Media is currently generating about 0.0 per unit of risk. If you would invest  757.00  in Anhui Xinhua Media on October 4, 2024 and sell it today you would lose (20.00) from holding Anhui Xinhua Media or give up 2.64% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Anhui Xinhua Media  vs.  China Publishing Media

 Performance 
       Timeline  
Anhui Xinhua Media 

Risk-Adjusted Performance

0 of 100

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

Risk-Adjusted Performance

0 of 100

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

Anhui Xinhua and China Publishing Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Anhui Xinhua and China Publishing

The main advantage of trading using opposite Anhui Xinhua and China Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Xinhua position performs unexpectedly, China Publishing 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 China Publishing will offset losses from the drop in China Publishing's long position.
The idea behind Anhui Xinhua Media and China Publishing Media 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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