Correlation Between China Securities and Yunnan Aluminium
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By analyzing existing cross correlation between China Securities 800 and Yunnan Aluminium Co, you can compare the effects of market volatilities on China Securities and Yunnan Aluminium 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 China Securities with a short position of Yunnan Aluminium. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Yunnan Aluminium.
Diversification Opportunities for China Securities and Yunnan Aluminium
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Yunnan is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Yunnan Aluminium Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunnan Aluminium and China Securities 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 China Securities 800 are associated (or correlated) with Yunnan Aluminium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunnan Aluminium has no effect on the direction of China Securities i.e., China Securities and Yunnan Aluminium go up and down completely randomly.
Pair Corralation between China Securities and Yunnan Aluminium
Assuming the 90 days trading horizon China Securities is expected to generate 1.48 times less return on investment than Yunnan Aluminium. But when comparing it to its historical volatility, China Securities 800 is 1.74 times less risky than Yunnan Aluminium. It trades about 0.04 of its potential returns per unit of risk. Yunnan Aluminium Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,254 in Yunnan Aluminium Co on August 24, 2024 and sell it today you would earn a total of 168.00 from holding Yunnan Aluminium Co or generate 13.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Securities 800 vs. Yunnan Aluminium Co
Performance |
| Timeline |
China Securities and Yunnan Aluminium Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Yunnan Aluminium Co
Pair trading matchups for Yunnan Aluminium
Pair Trading with China Securities and Yunnan Aluminium
The main advantage of trading using opposite China Securities and Yunnan Aluminium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Yunnan Aluminium 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 Yunnan Aluminium will offset losses from the drop in Yunnan Aluminium's long position.| China Securities vs. Zhejiang Yayi Metal | China Securities vs. Huatian Hotel Group | China Securities vs. Semiconductor Manufacturing Electronics | China Securities vs. Dalian Thermal Power |
| Yunnan Aluminium vs. Zhejiang Kingland Pipeline | Yunnan Aluminium vs. Xiangyang Automobile Bearing | Yunnan Aluminium vs. China Publishing Media | Yunnan Aluminium vs. Chinese Universe Publishing |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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