Correlation Between China Molybdenum and Anhui Gujing
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By analyzing existing cross correlation between China Molybdenum Co and Anhui Gujing Distillery, you can compare the effects of market volatilities on China Molybdenum and Anhui Gujing 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 China Molybdenum with a short position of Anhui Gujing. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Molybdenum and Anhui Gujing.
Diversification Opportunities for China Molybdenum and Anhui Gujing
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Anhui is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding China Molybdenum Co and Anhui Gujing Distillery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Gujing Distillery and China Molybdenum 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 China Molybdenum Co are associated (or correlated) with Anhui Gujing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Gujing Distillery has no effect on the direction of China Molybdenum i.e., China Molybdenum and Anhui Gujing go up and down completely randomly.
Pair Corralation between China Molybdenum and Anhui Gujing
Assuming the 90 days trading horizon China Molybdenum Co is expected to under-perform the Anhui Gujing. But the stock apears to be less risky and, when comparing its historical volatility, China Molybdenum Co is 1.54 times less risky than Anhui Gujing. The stock trades about -0.29 of its potential returns per unit of risk. The Anhui Gujing Distillery is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 18,605 in Anhui Gujing Distillery on October 7, 2024 and sell it today you would lose (1,407) from holding Anhui Gujing Distillery or give up 7.56% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
China Molybdenum Co vs. Anhui Gujing Distillery
Performance |
Timeline |
China Molybdenum |
Anhui Gujing Distillery |
China Molybdenum and Anhui Gujing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Molybdenum and Anhui Gujing
The main advantage of trading using opposite China Molybdenum and Anhui Gujing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Molybdenum position performs unexpectedly, Anhui Gujing 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 Anhui Gujing will offset losses from the drop in Anhui Gujing's long position.China Molybdenum vs. Yankershop Food Co | China Molybdenum vs. Hubeiyichang Transportation Group | China Molybdenum vs. V V Food | China Molybdenum vs. Xinjiang Tianrun Dairy |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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