Correlation Between China Aluminum and Jiangxi Hengda
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By analyzing existing cross correlation between China Aluminum International and Jiangxi Hengda Hi Tech, you can compare the effects of market volatilities on China Aluminum and Jiangxi Hengda 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 China Aluminum with a short position of Jiangxi Hengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Aluminum and Jiangxi Hengda.
Diversification Opportunities for China Aluminum and Jiangxi Hengda
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Jiangxi is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding China Aluminum International and Jiangxi Hengda Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Hengda Hi and China Aluminum 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 China Aluminum International are associated (or correlated) with Jiangxi Hengda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Hengda Hi has no effect on the direction of China Aluminum i.e., China Aluminum and Jiangxi Hengda go up and down completely randomly.
Pair Corralation between China Aluminum and Jiangxi Hengda
Assuming the 90 days trading horizon China Aluminum is expected to generate 1.78 times less return on investment than Jiangxi Hengda. But when comparing it to its historical volatility, China Aluminum International is 1.26 times less risky than Jiangxi Hengda. It trades about 0.07 of its potential returns per unit of risk. Jiangxi Hengda Hi Tech is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 447.00 in Jiangxi Hengda Hi Tech on September 25, 2024 and sell it today you would earn a total of 89.00 from holding Jiangxi Hengda Hi Tech or generate 19.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
China Aluminum International vs. Jiangxi Hengda Hi Tech
Performance |
Timeline |
China Aluminum Inter |
Jiangxi Hengda Hi |
China Aluminum and Jiangxi Hengda Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Aluminum and Jiangxi Hengda
The main advantage of trading using opposite China Aluminum and Jiangxi Hengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Aluminum position performs unexpectedly, Jiangxi Hengda 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 Jiangxi Hengda will offset losses from the drop in Jiangxi Hengda's long position.China Aluminum vs. Jiangxi Hengda Hi Tech | China Aluminum vs. Jiangxi Naipu Mining | China Aluminum vs. Zijin Mining Group | China Aluminum vs. Zhejiang JIULI Hi tech |
Jiangxi Hengda vs. Zijin Mining Group | Jiangxi Hengda vs. Baoshan Iron Steel | Jiangxi Hengda vs. Shandong Gold Mining | Jiangxi Hengda vs. Rongsheng Petrochemical Co |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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