Correlation Between Yunnan Aluminium and Hubei Forbon
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By analyzing existing cross correlation between Yunnan Aluminium Co and Hubei Forbon Technology, you can compare the effects of market volatilities on Yunnan Aluminium and Hubei Forbon 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 Hubei Forbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunnan Aluminium and Hubei Forbon.
Diversification Opportunities for Yunnan Aluminium and Hubei Forbon
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Yunnan and Hubei is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Yunnan Aluminium Co and Hubei Forbon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Forbon Technology 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 Hubei Forbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Forbon Technology has no effect on the direction of Yunnan Aluminium i.e., Yunnan Aluminium and Hubei Forbon go up and down completely randomly.
Pair Corralation between Yunnan Aluminium and Hubei Forbon
Assuming the 90 days trading horizon Yunnan Aluminium Co is expected to under-perform the Hubei Forbon. But the stock apears to be less risky and, when comparing its historical volatility, Yunnan Aluminium Co is 1.07 times less risky than Hubei Forbon. The stock trades about -0.16 of its potential returns per unit of risk. The Hubei Forbon Technology is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 831.00 in Hubei Forbon Technology on August 29, 2024 and sell it today you would lose (6.00) from holding Hubei Forbon Technology or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yunnan Aluminium Co vs. Hubei Forbon Technology
Performance |
| Timeline |
| Yunnan Aluminium |
| Hubei Forbon Technology |
Yunnan Aluminium and Hubei Forbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yunnan Aluminium and Hubei Forbon
The main advantage of trading using opposite Yunnan Aluminium and Hubei Forbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunnan Aluminium position performs unexpectedly, Hubei Forbon 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 Hubei Forbon will offset losses from the drop in Hubei Forbon'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 |
| Hubei Forbon vs. Zijin Mining Group | Hubei Forbon vs. Wanhua Chemical Group | Hubei Forbon vs. Baoshan Iron Steel | Hubei Forbon 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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