Correlation Between Yunnan Aluminium and Hangzhou Gaoxin
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By analyzing existing cross correlation between Yunnan Aluminium Co and Hangzhou Gaoxin Rubber, you can compare the effects of market volatilities on Yunnan Aluminium and Hangzhou Gaoxin 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 Hangzhou Gaoxin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunnan Aluminium and Hangzhou Gaoxin.
Diversification Opportunities for Yunnan Aluminium and Hangzhou Gaoxin
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Yunnan and Hangzhou is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Yunnan Aluminium Co and Hangzhou Gaoxin Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Gaoxin Rubber 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 Hangzhou Gaoxin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Gaoxin Rubber has no effect on the direction of Yunnan Aluminium i.e., Yunnan Aluminium and Hangzhou Gaoxin go up and down completely randomly.
Pair Corralation between Yunnan Aluminium and Hangzhou Gaoxin
Assuming the 90 days trading horizon Yunnan Aluminium Co is expected to under-perform the Hangzhou Gaoxin. But the stock apears to be less risky and, when comparing its historical volatility, Yunnan Aluminium Co is 5.67 times less risky than Hangzhou Gaoxin. The stock trades about -0.04 of its potential returns per unit of risk. The Hangzhou Gaoxin Rubber is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 927.00 in Hangzhou Gaoxin Rubber on November 27, 2024 and sell it today you would earn a total of 567.00 from holding Hangzhou Gaoxin Rubber or generate 61.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yunnan Aluminium Co vs. Hangzhou Gaoxin Rubber
Performance |
| Timeline |
| Yunnan Aluminium |
| Hangzhou Gaoxin Rubber |
Yunnan Aluminium and Hangzhou Gaoxin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yunnan Aluminium and Hangzhou Gaoxin
The main advantage of trading using opposite Yunnan Aluminium and Hangzhou Gaoxin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunnan Aluminium position performs unexpectedly, Hangzhou Gaoxin 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 Hangzhou Gaoxin will offset losses from the drop in Hangzhou Gaoxin's long position.| Yunnan Aluminium vs. Aofu Environmental Technology | Yunnan Aluminium vs. Kuang Chi Technologies | Yunnan Aluminium vs. Olympic Circuit Technology | Yunnan Aluminium vs. HUAQIN TECHNOLOGY LTD |
| Hangzhou Gaoxin vs. Dongfeng Automobile Co | Hangzhou Gaoxin vs. iSoftStone Information Technology | Hangzhou Gaoxin vs. CICT Mobile Communication | Hangzhou Gaoxin vs. Jilin Jlu Communication |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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