Correlation Between Tongling Nonferrous and Fuda Alloy
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By analyzing existing cross correlation between Tongling Nonferrous Metals and Fuda Alloy Materials, you can compare the effects of market volatilities on Tongling Nonferrous and Fuda Alloy 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 Fuda Alloy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongling Nonferrous and Fuda Alloy.
Diversification Opportunities for Tongling Nonferrous and Fuda Alloy
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tongling and Fuda is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Tongling Nonferrous Metals and Fuda Alloy Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuda Alloy Materials 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 Fuda Alloy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuda Alloy Materials has no effect on the direction of Tongling Nonferrous i.e., Tongling Nonferrous and Fuda Alloy go up and down completely randomly.
Pair Corralation between Tongling Nonferrous and Fuda Alloy
Assuming the 90 days trading horizon Tongling Nonferrous Metals is expected to under-perform the Fuda Alloy. But the stock apears to be less risky and, when comparing its historical volatility, Tongling Nonferrous Metals is 2.93 times less risky than Fuda Alloy. The stock trades about -0.04 of its potential returns per unit of risk. The Fuda Alloy Materials is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,305 in Fuda Alloy Materials on October 28, 2024 and sell it today you would earn a total of 228.00 from holding Fuda Alloy Materials or generate 17.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tongling Nonferrous Metals vs. Fuda Alloy Materials
Performance |
| Timeline |
| Tongling Nonferrous |
| Fuda Alloy Materials |
Tongling Nonferrous and Fuda Alloy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongling Nonferrous and Fuda Alloy
The main advantage of trading using opposite Tongling Nonferrous and Fuda Alloy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongling Nonferrous position performs unexpectedly, Fuda Alloy 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 Fuda Alloy will offset losses from the drop in Fuda Alloy's long position.| Tongling Nonferrous vs. Zijin Mining Group | Tongling Nonferrous vs. Wanhua Chemical Group | Tongling Nonferrous vs. Baoshan Iron Steel | Tongling Nonferrous vs. Shandong Gold Mining |
| Fuda Alloy vs. Industrial and Commercial | Fuda Alloy vs. China Construction Bank | Fuda Alloy vs. Bank of China | Fuda Alloy vs. Agricultural Bank of |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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