Correlation Between Yunnan Aluminium and Weihai Guangwei
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By analyzing existing cross correlation between Yunnan Aluminium Co and Weihai Guangwei Composites, you can compare the effects of market volatilities on Yunnan Aluminium and Weihai Guangwei 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 Weihai Guangwei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunnan Aluminium and Weihai Guangwei.
Diversification Opportunities for Yunnan Aluminium and Weihai Guangwei
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yunnan and Weihai is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Yunnan Aluminium Co and Weihai Guangwei Composites in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weihai Guangwei Comp 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 Weihai Guangwei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weihai Guangwei Comp has no effect on the direction of Yunnan Aluminium i.e., Yunnan Aluminium and Weihai Guangwei go up and down completely randomly.
Pair Corralation between Yunnan Aluminium and Weihai Guangwei
Assuming the 90 days trading horizon Yunnan Aluminium Co is expected to under-perform the Weihai Guangwei. But the stock apears to be less risky and, when comparing its historical volatility, Yunnan Aluminium Co is 1.07 times less risky than Weihai Guangwei. The stock trades about -0.06 of its potential returns per unit of risk. The Weihai Guangwei Composites is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,073 in Weihai Guangwei Composites on December 1, 2024 and sell it today you would earn a total of 131.00 from holding Weihai Guangwei Composites or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Yunnan Aluminium Co vs. Weihai Guangwei Composites
Performance |
| Timeline |
| Yunnan Aluminium |
| Weihai Guangwei Comp |
Yunnan Aluminium and Weihai Guangwei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yunnan Aluminium and Weihai Guangwei
The main advantage of trading using opposite Yunnan Aluminium and Weihai Guangwei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunnan Aluminium position performs unexpectedly, Weihai Guangwei 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 Weihai Guangwei will offset losses from the drop in Weihai Guangwei's long position.| Yunnan Aluminium vs. Jahen Household Products | Yunnan Aluminium vs. Anhui Tongguan Copper | Yunnan Aluminium vs. North Copper Shanxi | Yunnan Aluminium vs. Marssenger Kitchenware Co |
| Weihai Guangwei vs. Western Mining Co | Weihai Guangwei vs. Guizhou Chanhen Chemical | Weihai Guangwei vs. Lianhe Chemical Technology | Weihai Guangwei vs. HeBei Jinniu Chemical |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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