Correlation Between Aluminum Corp and Shijiazhuang Tonhe
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By analyzing existing cross correlation between Aluminum Corp of and Shijiazhuang Tonhe Electronics, you can compare the effects of market volatilities on Aluminum Corp and Shijiazhuang Tonhe 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 Aluminum Corp with a short position of Shijiazhuang Tonhe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminum Corp and Shijiazhuang Tonhe.
Diversification Opportunities for Aluminum Corp and Shijiazhuang Tonhe
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aluminum and Shijiazhuang is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum Corp of and Shijiazhuang Tonhe Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shijiazhuang Tonhe and Aluminum Corp 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 Aluminum Corp of are associated (or correlated) with Shijiazhuang Tonhe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shijiazhuang Tonhe has no effect on the direction of Aluminum Corp i.e., Aluminum Corp and Shijiazhuang Tonhe go up and down completely randomly.
Pair Corralation between Aluminum Corp and Shijiazhuang Tonhe
Assuming the 90 days trading horizon Aluminum Corp is expected to generate 7.47 times less return on investment than Shijiazhuang Tonhe. But when comparing it to its historical volatility, Aluminum Corp of is 1.33 times less risky than Shijiazhuang Tonhe. It trades about 0.01 of its potential returns per unit of risk. Shijiazhuang Tonhe Electronics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,393 in Shijiazhuang Tonhe Electronics on September 25, 2024 and sell it today you would earn a total of 324.00 from holding Shijiazhuang Tonhe Electronics or generate 23.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Aluminum Corp of vs. Shijiazhuang Tonhe Electronics
Performance |
Timeline |
Aluminum Corp |
Shijiazhuang Tonhe |
Aluminum Corp and Shijiazhuang Tonhe Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aluminum Corp and Shijiazhuang Tonhe
The main advantage of trading using opposite Aluminum Corp and Shijiazhuang Tonhe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminum Corp position performs unexpectedly, Shijiazhuang Tonhe 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 Shijiazhuang Tonhe will offset losses from the drop in Shijiazhuang Tonhe's long position.Aluminum Corp vs. Wanhua Chemical Group | Aluminum Corp vs. Shandong Gold Mining | Aluminum Corp vs. Rongsheng Petrochemical Co | Aluminum Corp vs. Inner Mongolia BaoTou |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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