Correlation Between China Publishing and Aluminum Corp

Can any of the company-specific risk be diversified away by investing in both China Publishing and Aluminum Corp 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 China Publishing and Aluminum Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between China Publishing Media and Aluminum Corp of, you can compare the effects of market volatilities on China Publishing and Aluminum Corp 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 Publishing with a short position of Aluminum Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Publishing and Aluminum Corp.

Diversification Opportunities for China Publishing and Aluminum Corp

0.04

Correlation Coefficient

China Publishing  Aluminum Corp

Significant diversification

The 3 months correlation between China and Aluminum is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding China Publishing Media and Aluminum Corp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminum Corp and China Publishing 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 Publishing Media are associated (or correlated) with Aluminum Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminum Corp has no effect on the direction of China Publishing i.e., China Publishing and Aluminum Corp go up and down completely randomly.

Pair Corralation between China Publishing and Aluminum Corp

Assuming the 90 days trading horizon China Publishing Media is expected to under-perform the Aluminum Corp. In addition to that, China Publishing is 1.03 times more volatile than Aluminum Corp of. It trades about -0.12 of its total potential returns per unit of risk. Aluminum Corp of is currently generating about 0.04 per unit of volatility. If you would invest  735.00  in Aluminum Corp of on December 24, 2024 and sell it today you would earn a total of  23.00  from holding Aluminum Corp of or generate 3.13% return on investment over 90 days.

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

China Publishing Media  vs.  Aluminum Corp of

China Publishing Media

Risk-Adjusted Performance

Very Weak

Over the last 90 days China Publishing Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Aluminum Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aluminum Corp of are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Aluminum Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with China Publishing and Aluminum Corp

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

The idea behind China Publishing Media and Aluminum Corp of 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.