Correlation Between Tongling Nonferrous and Shandong Hongchuang
Specify exactly 2 symbols:
By analyzing existing cross correlation between Tongling Nonferrous Metals and Shandong Hongchuang Aluminum, you can compare the effects of market volatilities on Tongling Nonferrous and Shandong Hongchuang 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 Tongling Nonferrous with a short position of Shandong Hongchuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongling Nonferrous and Shandong Hongchuang.
Diversification Opportunities for Tongling Nonferrous and Shandong Hongchuang
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tongling and Shandong is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Tongling Nonferrous Metals and Shandong Hongchuang Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Hongchuang and Tongling Nonferrous 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 Tongling Nonferrous Metals are associated (or correlated) with Shandong Hongchuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Hongchuang has no effect on the direction of Tongling Nonferrous i.e., Tongling Nonferrous and Shandong Hongchuang go up and down completely randomly.
Pair Corralation between Tongling Nonferrous and Shandong Hongchuang
Assuming the 90 days trading horizon Tongling Nonferrous is expected to generate 3.51 times less return on investment than Shandong Hongchuang. But when comparing it to its historical volatility, Tongling Nonferrous Metals is 3.25 times less risky than Shandong Hongchuang. It trades about 0.08 of its potential returns per unit of risk. Shandong Hongchuang Aluminum is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 987.00 in Shandong Hongchuang Aluminum on November 8, 2024 and sell it today you would earn a total of 46.00 from holding Shandong Hongchuang Aluminum or generate 4.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tongling Nonferrous Metals vs. Shandong Hongchuang Aluminum
Performance |
| Timeline |
| Tongling Nonferrous |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shandong Hongchuang |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Tongling Nonferrous and Shandong Hongchuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongling Nonferrous and Shandong Hongchuang
The main advantage of trading using opposite Tongling Nonferrous and Shandong Hongchuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongling Nonferrous position performs unexpectedly, Shandong Hongchuang 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 Shandong Hongchuang will offset losses from the drop in Shandong Hongchuang's long position.The idea behind Tongling Nonferrous Metals and Shandong Hongchuang Aluminum 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |