Correlation Between ANGANG STEEL and TRIPCOM GROUP

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

By analyzing existing cross correlation between ANGANG STEEL H and TRIPCOM GROUP DL 00125, you can compare the effects of market volatilities on ANGANG STEEL and TRIPCOM GROUP 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 ANGANG STEEL with a short position of TRIPCOM GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGANG STEEL and TRIPCOM GROUP.

Diversification Opportunities for ANGANG STEEL and TRIPCOM GROUP

0.39

Correlation Coefficient

ANGANG STEEL  TRIPCOM GROUP

Weak diversification

The 3 months correlation between ANGANG and TRIPCOM is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding ANGANG STEEL H and TRIPCOM GROUP DL 00125 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRIPCOM GROUP DL and ANGANG STEEL 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 ANGANG STEEL H are associated (or correlated) with TRIPCOM GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRIPCOM GROUP DL has no effect on the direction of ANGANG STEEL i.e., ANGANG STEEL and TRIPCOM GROUP go up and down completely randomly.

Pair Corralation between ANGANG STEEL and TRIPCOM GROUP

Assuming the 90 days trading horizon ANGANG STEEL H is expected to under-perform the TRIPCOM GROUP. In addition to that, ANGANG STEEL is 1.06 times more volatile than TRIPCOM GROUP DL 00125. It trades about -0.01 of its total potential returns per unit of risk. TRIPCOM GROUP DL 00125 is currently generating about 0.08 per unit of volatility. If you would invest  5,384  in TRIPCOM GROUP DL 00125 on October 8, 2024 and sell it today you would earn a total of  708.00  from holding TRIPCOM GROUP DL 00125 or generate 13.15% return on investment over 90 days.

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

ANGANG STEEL H   vs.  TRIPCOM GROUP DL 00125

ANGANG STEEL H

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANGANG STEEL H has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ANGANG STEEL is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

TRIPCOM GROUP DL

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TRIPCOM GROUP DL 00125 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TRIPCOM GROUP reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANGANG STEEL and TRIPCOM GROUP

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

The idea behind ANGANG STEEL H and TRIPCOM GROUP DL 00125 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.