Correlation Between Anji Foodstuff and Advanced Technology

Can any of the company-specific risk be diversified away by investing in both Anji Foodstuff and Advanced Technology 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 Advanced Technology 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 Advanced Technology Materials, you can compare the effects of market volatilities on Anji Foodstuff and Advanced Technology 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 Advanced Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anji Foodstuff and Advanced Technology.

Diversification Opportunities for Anji Foodstuff and Advanced Technology

0.78

Correlation Coefficient

Anji Foodstuff  Advanced Technology

Poor diversification

The 3 months correlation between Anji and Advanced is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Anji Foodstuff Co and Advanced Technology Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Technology 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 Advanced Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Technology has no effect on the direction of Anji Foodstuff i.e., Anji Foodstuff and Advanced Technology go up and down completely randomly.

Pair Corralation between Anji Foodstuff and Advanced Technology

Assuming the 90 days trading horizon Anji Foodstuff Co is expected to generate 1.39 times more return on investment than Advanced Technology. However, Anji Foodstuff is 1.39 times more volatile than Advanced Technology Materials. It trades about 0.14 of its potential returns per unit of risk. Advanced Technology Materials is currently generating about -0.06 per unit of risk. If you would invest  799.00  in Anji Foodstuff Co on September 22, 2024 and sell it today you would earn a total of  104.00  from holding Anji Foodstuff Co or generate 13.02% return on investment over 90 days.

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

Anji Foodstuff Co  vs.  Advanced Technology Materials

Anji Foodstuff

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Anji Foodstuff Co are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Anji Foodstuff sustained solid returns over the last few months and may actually be approaching a breakup point.

Advanced Technology

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Technology Materials are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Advanced Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Anji Foodstuff and Advanced Technology

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

The idea behind Anji Foodstuff Co and Advanced Technology Materials 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.