Correlation Between Yunnan Aluminium and Shandong Polymer
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By analyzing existing cross correlation between Yunnan Aluminium Co and Shandong Polymer Biochemicals, you can compare the effects of market volatilities on Yunnan Aluminium and Shandong Polymer 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 Shandong Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunnan Aluminium and Shandong Polymer.
Diversification Opportunities for Yunnan Aluminium and Shandong Polymer
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Yunnan and Shandong is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Yunnan Aluminium Co and Shandong Polymer Biochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Polymer Bio 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 Shandong Polymer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Polymer Bio has no effect on the direction of Yunnan Aluminium i.e., Yunnan Aluminium and Shandong Polymer go up and down completely randomly.
Pair Corralation between Yunnan Aluminium and Shandong Polymer
Assuming the 90 days trading horizon Yunnan Aluminium is expected to generate 1.64 times less return on investment than Shandong Polymer. But when comparing it to its historical volatility, Yunnan Aluminium Co is 1.17 times less risky than Shandong Polymer. It trades about 0.1 of its potential returns per unit of risk. Shandong Polymer Biochemicals is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 363.00 in Shandong Polymer Biochemicals on August 29, 2024 and sell it today you would earn a total of 95.00 from holding Shandong Polymer Biochemicals or generate 26.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yunnan Aluminium Co vs. Shandong Polymer Biochemicals
Performance |
| Timeline |
| Yunnan Aluminium |
| Shandong Polymer Bio |
Yunnan Aluminium and Shandong Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yunnan Aluminium and Shandong Polymer
The main advantage of trading using opposite Yunnan Aluminium and Shandong Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunnan Aluminium position performs unexpectedly, Shandong Polymer 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 Polymer will offset losses from the drop in Shandong Polymer's long position.| Yunnan Aluminium vs. Suzhou Douson Drilling | Yunnan Aluminium vs. Jinhui Liquor Co | Yunnan Aluminium vs. Shandong Mining Machinery | Yunnan Aluminium vs. Hefei Metalforming Mach |
| Shandong Polymer vs. Zijin Mining Group | Shandong Polymer vs. Wanhua Chemical Group | Shandong Polymer vs. Baoshan Iron Steel | Shandong Polymer vs. Shandong Gold Mining |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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