Correlation Between Admiral Group and Anhui Conch

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

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

Diversification Opportunities for Admiral Group and Anhui Conch

0.7

Correlation Coefficient

Admiral Group  Anhui Conch

Poor diversification

The 3 months correlation between Admiral and Anhui is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Admiral Group plc and Anhui Conch Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Conch Cement and Admiral Group 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 Admiral Group plc are associated (or correlated) with Anhui Conch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Conch Cement has no effect on the direction of Admiral Group i.e., Admiral Group and Anhui Conch go up and down completely randomly.

Pair Corralation between Admiral Group and Anhui Conch

Assuming the 90 days horizon Admiral Group plc is expected to generate 0.55 times more return on investment than Anhui Conch. However, Admiral Group plc is 1.81 times less risky than Anhui Conch. It trades about 0.1 of its potential returns per unit of risk. Anhui Conch Cement is currently generating about 0.06 per unit of risk. If you would invest  4,366  in Admiral Group plc on May 6, 2025 and sell it today you would earn a total of  369.00  from holding Admiral Group plc or generate 8.45% return on investment over 90 days.

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

Admiral Group plc  vs.  Anhui Conch Cement

Admiral Group plc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Admiral Group plc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Admiral Group may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Anhui Conch Cement

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Anhui Conch Cement are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical indicators, Anhui Conch may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Admiral Group and Anhui Conch

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

The idea behind Admiral Group plc and Anhui Conch Cement 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.