Correlation Between Yunnan Aluminium and Xiamen Hexing
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By analyzing existing cross correlation between Yunnan Aluminium Co and Xiamen Hexing Packaging, you can compare the effects of market volatilities on Yunnan Aluminium and Xiamen Hexing 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 Yunnan Aluminium with a short position of Xiamen Hexing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunnan Aluminium and Xiamen Hexing.
Diversification Opportunities for Yunnan Aluminium and Xiamen Hexing
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yunnan and Xiamen is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Yunnan Aluminium Co and Xiamen Hexing Packaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Hexing Packaging and Yunnan Aluminium 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 Yunnan Aluminium Co are associated (or correlated) with Xiamen Hexing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Hexing Packaging has no effect on the direction of Yunnan Aluminium i.e., Yunnan Aluminium and Xiamen Hexing go up and down completely randomly.
Pair Corralation between Yunnan Aluminium and Xiamen Hexing
Assuming the 90 days trading horizon Yunnan Aluminium Co is expected to under-perform the Xiamen Hexing. In addition to that, Yunnan Aluminium is 1.62 times more volatile than Xiamen Hexing Packaging. It trades about -0.09 of its total potential returns per unit of risk. Xiamen Hexing Packaging is currently generating about 0.24 per unit of volatility. If you would invest 306.00 in Xiamen Hexing Packaging on September 12, 2024 and sell it today you would earn a total of 26.00 from holding Xiamen Hexing Packaging or generate 8.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yunnan Aluminium Co vs. Xiamen Hexing Packaging
Performance |
| Timeline |
| Yunnan Aluminium |
| Xiamen Hexing Packaging |
Yunnan Aluminium and Xiamen Hexing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yunnan Aluminium and Xiamen Hexing
The main advantage of trading using opposite Yunnan Aluminium and Xiamen Hexing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunnan Aluminium position performs unexpectedly, Xiamen Hexing 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 Xiamen Hexing will offset losses from the drop in Xiamen Hexing's long position.| Yunnan Aluminium vs. Zijin Mining Group | Yunnan Aluminium vs. Wanhua Chemical Group | Yunnan Aluminium vs. Baoshan Iron Steel | Yunnan Aluminium vs. Rongsheng Petrochemical Co |
| Xiamen Hexing vs. Linewell Software Co | Xiamen Hexing vs. Iat Automobile Technology | Xiamen Hexing vs. Northking Information Technology | Xiamen Hexing vs. Jiujiang Shanshui Technology |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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