Correlation Between ANGANG STEEL and FEMALE HEALTH

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

Diversification Opportunities for ANGANG STEEL and FEMALE HEALTH

-0.21

Correlation Coefficient

ANGANG STEEL  FEMALE HEALTH

Very good diversification

The 3 months correlation between ANGANG and FEMALE is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding ANGANG STEEL H and FEMALE HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEMALE HEALTH 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 FEMALE HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEMALE HEALTH has no effect on the direction of ANGANG STEEL i.e., ANGANG STEEL and FEMALE HEALTH go up and down completely randomly.

Pair Corralation between ANGANG STEEL and FEMALE HEALTH

Assuming the 90 days trading horizon ANGANG STEEL H is expected to under-perform the FEMALE HEALTH. But the stock apears to be less risky and, when comparing its historical volatility, ANGANG STEEL H is 1.73 times less risky than FEMALE HEALTH. The stock trades about -0.01 of its potential returns per unit of risk. The FEMALE HEALTH is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  76.00  in FEMALE HEALTH on October 26, 2024 and sell it today you would earn a total of  25.00  from holding FEMALE HEALTH or generate 32.89% return on investment over 90 days.

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

ANGANG STEEL H   vs.  FEMALE HEALTH

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

FEMALE HEALTH

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FEMALE HEALTH are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, FEMALE HEALTH exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANGANG STEEL and FEMALE HEALTH

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

The idea behind ANGANG STEEL H and FEMALE HEALTH 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.