Correlation Between Anji Foodstuff and Citic Offshore

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

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

Diversification Opportunities for Anji Foodstuff and Citic Offshore

0.53

Correlation Coefficient

Anji Foodstuff  Citic Offshore

Very weak diversification

The 3 months correlation between Anji and Citic is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Anji Foodstuff Co and Citic Offshore Helicopter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citic Offshore Helicopter and Anji Foodstuff 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 Anji Foodstuff Co are associated (or correlated) with Citic Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citic Offshore Helicopter has no effect on the direction of Anji Foodstuff i.e., Anji Foodstuff and Citic Offshore go up and down completely randomly.

Pair Corralation between Anji Foodstuff and Citic Offshore

Assuming the 90 days trading horizon Anji Foodstuff Co is expected to generate 1.54 times more return on investment than Citic Offshore. However, Anji Foodstuff is 1.54 times more volatile than Citic Offshore Helicopter. It trades about -0.05 of its potential returns per unit of risk. Citic Offshore Helicopter is currently generating about -0.14 per unit of risk. If you would invest  914.00  in Anji Foodstuff Co on October 5, 2024 and sell it today you would lose (70.00) from holding Anji Foodstuff Co or give up 7.66% of portfolio value over 90 days.

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

Anji Foodstuff Co  vs.  Citic Offshore Helicopter

Anji Foodstuff

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Anji Foodstuff Co are ranked lower than 2 (%) 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.

Citic Offshore Helicopter

Risk-Adjusted Performance

6 of 100

Modest

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

Pair Trading with Anji Foodstuff and Citic Offshore

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

The idea behind Anji Foodstuff Co and Citic Offshore Helicopter 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.