Correlation Between Yunnan Aluminium and Cathay Biotech
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By analyzing existing cross correlation between Yunnan Aluminium Co and Cathay Biotech, you can compare the effects of market volatilities on Yunnan Aluminium and Cathay Biotech 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 Cathay Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunnan Aluminium and Cathay Biotech.
Diversification Opportunities for Yunnan Aluminium and Cathay Biotech
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Yunnan and Cathay is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Yunnan Aluminium Co and Cathay Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Biotech 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 Cathay Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay Biotech has no effect on the direction of Yunnan Aluminium i.e., Yunnan Aluminium and Cathay Biotech go up and down completely randomly.
Pair Corralation between Yunnan Aluminium and Cathay Biotech
Assuming the 90 days trading horizon Yunnan Aluminium Co is expected to generate 1.32 times more return on investment than Cathay Biotech. However, Yunnan Aluminium is 1.32 times more volatile than Cathay Biotech. It trades about 0.19 of its potential returns per unit of risk. Cathay Biotech is currently generating about -0.23 per unit of risk. If you would invest 1,422 in Yunnan Aluminium Co on October 22, 2024 and sell it today you would earn a total of 254.00 from holding Yunnan Aluminium Co or generate 17.86% 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. Cathay Biotech
Performance |
| Timeline |
| Yunnan Aluminium |
| Cathay Biotech |
Yunnan Aluminium and Cathay Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yunnan Aluminium and Cathay Biotech
The main advantage of trading using opposite Yunnan Aluminium and Cathay Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunnan Aluminium position performs unexpectedly, Cathay Biotech 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 Cathay Biotech will offset losses from the drop in Cathay Biotech's long position.| Yunnan Aluminium vs. Fujian Longzhou Transportation | Yunnan Aluminium vs. Hunan TV Broadcast | Yunnan Aluminium vs. Dazhong Transportation Group | Yunnan Aluminium vs. China Minmetals Rare |
| Cathay Biotech vs. Shenzhen Noposion Agrochemicals | Cathay Biotech vs. Lotus Health Group | Cathay Biotech vs. Hangzhou Minsheng Healthcare | Cathay Biotech vs. Thinkingdom Media Group |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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