Correlation Between Yunnan Aluminium and Hubei Xingfa
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By analyzing existing cross correlation between Yunnan Aluminium Co and Hubei Xingfa Chemicals, you can compare the effects of market volatilities on Yunnan Aluminium and Hubei Xingfa 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 Xingfa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunnan Aluminium and Hubei Xingfa.
Diversification Opportunities for Yunnan Aluminium and Hubei Xingfa
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 Xingfa Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Xingfa Chemicals 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 Xingfa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Xingfa Chemicals has no effect on the direction of Yunnan Aluminium i.e., Yunnan Aluminium and Hubei Xingfa go up and down completely randomly.
Pair Corralation between Yunnan Aluminium and Hubei Xingfa
Assuming the 90 days trading horizon Yunnan Aluminium Co is expected to under-perform the Hubei Xingfa. But the stock apears to be less risky and, when comparing its historical volatility, Yunnan Aluminium Co is 1.03 times less risky than Hubei Xingfa. The stock trades about -0.06 of its potential returns per unit of risk. The Hubei Xingfa Chemicals is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,213 in Hubei Xingfa Chemicals on September 1, 2024 and sell it today you would earn a total of 101.00 from holding Hubei Xingfa Chemicals or generate 4.56% return on investment 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 Xingfa Chemicals
Performance |
| Timeline |
| Yunnan Aluminium |
| Hubei Xingfa Chemicals |
Yunnan Aluminium and Hubei Xingfa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yunnan Aluminium and Hubei Xingfa
The main advantage of trading using opposite Yunnan Aluminium and Hubei Xingfa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunnan Aluminium position performs unexpectedly, Hubei Xingfa 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 Xingfa will offset losses from the drop in Hubei Xingfa's long position.| Yunnan Aluminium vs. Tianshui Huatian Technology | Yunnan Aluminium vs. Emdoor Information Co | Yunnan Aluminium vs. Niutech Environment Technology | Yunnan Aluminium vs. HUAQIN TECHNOLOGY LTD |
| Hubei Xingfa vs. Zijin Mining Group | Hubei Xingfa vs. Wanhua Chemical Group | Hubei Xingfa vs. Baoshan Iron Steel | Hubei Xingfa 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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