Correlation Between Anji Foodstuff and Xiangyang Automobile
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By analyzing existing cross correlation between Anji Foodstuff Co and Xiangyang Automobile Bearing, you can compare the effects of market volatilities on Anji Foodstuff and Xiangyang Automobile 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 Xiangyang Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anji Foodstuff and Xiangyang Automobile.
Diversification Opportunities for Anji Foodstuff and Xiangyang Automobile
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Anji and Xiangyang is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Anji Foodstuff Co and Xiangyang Automobile Bearing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiangyang Automobile 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 Xiangyang Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiangyang Automobile has no effect on the direction of Anji Foodstuff i.e., Anji Foodstuff and Xiangyang Automobile go up and down completely randomly.
Pair Corralation between Anji Foodstuff and Xiangyang Automobile
Assuming the 90 days trading horizon Anji Foodstuff is expected to generate 1.38 times less return on investment than Xiangyang Automobile. But when comparing it to its historical volatility, Anji Foodstuff Co is 1.5 times less risky than Xiangyang Automobile. It trades about 0.2 of its potential returns per unit of risk. Xiangyang Automobile Bearing is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 460.00 in Xiangyang Automobile Bearing on September 9, 2024 and sell it today you would earn a total of 217.00 from holding Xiangyang Automobile Bearing or generate 47.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Anji Foodstuff Co vs. Xiangyang Automobile Bearing
Performance |
Timeline |
Anji Foodstuff |
Xiangyang Automobile |
Anji Foodstuff and Xiangyang Automobile Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Anji Foodstuff and Xiangyang Automobile
The main advantage of trading using opposite Anji Foodstuff and Xiangyang Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anji Foodstuff position performs unexpectedly, Xiangyang Automobile 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 Xiangyang Automobile will offset losses from the drop in Xiangyang Automobile's long position.Anji Foodstuff vs. Shanghai Broadband Technology | Anji Foodstuff vs. Suzhou Douson Drilling | Anji Foodstuff vs. Dazhong Transportation Group | Anji Foodstuff vs. Hubeiyichang Transportation Group |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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