Correlation Between Chicony Power and ANJI Technology

Can any of the company-specific risk be diversified away by investing in both Chicony Power and ANJI 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 Chicony Power and ANJI Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chicony Power Technology and ANJI Technology Co, you can compare the effects of market volatilities on Chicony Power and ANJI 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 Chicony Power with a short position of ANJI Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicony Power and ANJI Technology.

Diversification Opportunities for Chicony Power and ANJI Technology

0.59

Correlation Coefficient

Chicony Power  ANJI Technology

Very weak diversification

The 3 months correlation between Chicony and ANJI is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Chicony Power Technology and ANJI Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANJI Technology and Chicony Power 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 Chicony Power Technology are associated (or correlated) with ANJI Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANJI Technology has no effect on the direction of Chicony Power i.e., Chicony Power and ANJI Technology go up and down completely randomly.

Pair Corralation between Chicony Power and ANJI Technology

Assuming the 90 days trading horizon Chicony Power is expected to generate 7.58 times less return on investment than ANJI Technology. But when comparing it to its historical volatility, Chicony Power Technology is 2.79 times less risky than ANJI Technology. It trades about 0.17 of its potential returns per unit of risk. ANJI Technology Co is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest  2,745  in ANJI Technology Co on October 24, 2024 and sell it today you would earn a total of  1,235  from holding ANJI Technology Co or generate 44.99% return on investment over 90 days.

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

Chicony Power Technology  vs.  ANJI Technology Co

Chicony Power Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chicony Power Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Chicony Power is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

ANJI Technology

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ANJI Technology Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, ANJI Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chicony Power and ANJI Technology

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

The idea behind Chicony Power Technology and ANJI Technology Co 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.