Correlation Between Yunnan Aluminium and Qinghai Salt
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By analyzing existing cross correlation between Yunnan Aluminium Co and Qinghai Salt Lake, you can compare the effects of market volatilities on Yunnan Aluminium and Qinghai Salt 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 Yunnan Aluminium with a short position of Qinghai Salt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunnan Aluminium and Qinghai Salt.
Diversification Opportunities for Yunnan Aluminium and Qinghai Salt
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yunnan and Qinghai is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Yunnan Aluminium Co and Qinghai Salt Lake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qinghai Salt Lake and Yunnan Aluminium 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 Yunnan Aluminium Co are associated (or correlated) with Qinghai Salt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qinghai Salt Lake has no effect on the direction of Yunnan Aluminium i.e., Yunnan Aluminium and Qinghai Salt go up and down completely randomly.
Pair Corralation between Yunnan Aluminium and Qinghai Salt
Assuming the 90 days trading horizon Yunnan Aluminium Co is expected to generate 1.35 times more return on investment than Qinghai Salt. However, Yunnan Aluminium is 1.35 times more volatile than Qinghai Salt Lake. It trades about 0.13 of its potential returns per unit of risk. Qinghai Salt Lake is currently generating about -0.29 per unit of risk. If you would invest 1,340 in Yunnan Aluminium Co on September 24, 2024 and sell it today you would earn a total of 67.00 from holding Yunnan Aluminium Co or generate 5.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Yunnan Aluminium Co vs. Qinghai Salt Lake
Performance |
Timeline |
Yunnan Aluminium |
Qinghai Salt Lake |
Yunnan Aluminium and Qinghai Salt Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Yunnan Aluminium and Qinghai Salt
The main advantage of trading using opposite Yunnan Aluminium and Qinghai Salt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunnan Aluminium position performs unexpectedly, Qinghai Salt 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 Qinghai Salt will offset losses from the drop in Qinghai Salt's long position.Yunnan Aluminium vs. Wanhua Chemical Group | Yunnan Aluminium vs. Baoshan Iron Steel | Yunnan Aluminium vs. Shandong Gold Mining | Yunnan Aluminium vs. Rongsheng Petrochemical Co |
Qinghai Salt vs. Zijin Mining Group | Qinghai Salt vs. Wanhua Chemical Group | Qinghai Salt vs. Baoshan Iron Steel | Qinghai Salt vs. Shandong Gold Mining |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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