Correlation Between Anhui Conch and Anhui Expressway

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

By analyzing existing cross correlation between Anhui Conch Cement and Anhui Expressway, you can compare the effects of market volatilities on Anhui Conch and Anhui Expressway 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 Anhui Conch with a short position of Anhui Expressway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Conch and Anhui Expressway.

Diversification Opportunities for Anhui Conch and Anhui Expressway

0.0

Correlation Coefficient

Anhui Conch  Anhui Expressway

Pay attention - limited upside

The 3 months correlation between Anhui and Anhui is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Conch Cement and Anhui Expressway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Expressway and Anhui Conch 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 Anhui Conch Cement are associated (or correlated) with Anhui Expressway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Expressway has no effect on the direction of Anhui Conch i.e., Anhui Conch and Anhui Expressway go up and down completely randomly.

Pair Corralation between Anhui Conch and Anhui Expressway

If you would invest (100.00) in Anhui Expressway on October 7, 2024 and sell it today you would earn a total of  100.00  from holding Anhui Expressway or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Anhui Conch Cement  vs.  Anhui Expressway

Anhui Conch Cement

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anhui Conch Cement has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Anhui Expressway

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Anhui Expressway has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Anhui Expressway is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Anhui Conch and Anhui Expressway

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

The idea behind Anhui Conch Cement and Anhui Expressway 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.