Correlation Between SERI INDUSTRIAL and Anhui Expressway

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

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

Diversification Opportunities for SERI INDUSTRIAL and Anhui Expressway

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Correlation Coefficient

SERI INDUSTRIAL  Anhui Expressway

Pay attention - limited upside

The 3 months correlation between SERI and Anhui is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SERI INDUSTRIAL EO and Anhui Expressway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Expressway and SERI INDUSTRIAL 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 SERI INDUSTRIAL EO 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 SERI INDUSTRIAL i.e., SERI INDUSTRIAL and Anhui Expressway go up and down completely randomly.

Pair Corralation between SERI INDUSTRIAL and Anhui Expressway

If you would invest (100.00) in Anhui Expressway on October 9, 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

SERI INDUSTRIAL EO  vs.  Anhui Expressway

SERI INDUSTRIAL EO

Risk-Adjusted Performance

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Very Weak

Over the last 90 days SERI INDUSTRIAL EO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical 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

Very Weak

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 SERI INDUSTRIAL and Anhui Expressway

The main advantage of trading using opposite SERI INDUSTRIAL and Anhui Expressway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SERI INDUSTRIAL 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 SERI INDUSTRIAL EO 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.