Correlation Between Zoje Resources and China Aluminum
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By analyzing existing cross correlation between Zoje Resources Investment and China Aluminum International, you can compare the effects of market volatilities on Zoje Resources and China Aluminum 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 Zoje Resources with a short position of China Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoje Resources and China Aluminum.
Diversification Opportunities for Zoje Resources and China Aluminum
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zoje and China is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Zoje Resources Investment and China Aluminum International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Aluminum Inter and Zoje Resources 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 Zoje Resources Investment are associated (or correlated) with China Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Aluminum Inter has no effect on the direction of Zoje Resources i.e., Zoje Resources and China Aluminum go up and down completely randomly.
Pair Corralation between Zoje Resources and China Aluminum
Assuming the 90 days trading horizon Zoje Resources Investment is expected to generate 2.92 times more return on investment than China Aluminum. However, Zoje Resources is 2.92 times more volatile than China Aluminum International. It trades about 0.22 of its potential returns per unit of risk. China Aluminum International is currently generating about -0.05 per unit of risk. If you would invest 269.00 in Zoje Resources Investment on September 13, 2024 and sell it today you would earn a total of 58.00 from holding Zoje Resources Investment or generate 21.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Zoje Resources Investment vs. China Aluminum International
Performance |
Timeline |
Zoje Resources Investment |
China Aluminum Inter |
Zoje Resources and China Aluminum Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zoje Resources and China Aluminum
The main advantage of trading using opposite Zoje Resources and China Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoje Resources position performs unexpectedly, China Aluminum 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 China Aluminum will offset losses from the drop in China Aluminum's long position.Zoje Resources vs. Industrial and Commercial | ||
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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