Correlation Between Shandong Hongchuang and China Aluminum
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By analyzing existing cross correlation between Shandong Hongchuang Aluminum and China Aluminum International, you can compare the effects of market volatilities on Shandong Hongchuang and China Aluminum 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 Shandong Hongchuang with a short position of China Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Hongchuang and China Aluminum.
Diversification Opportunities for Shandong Hongchuang and China Aluminum
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shandong and China is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Hongchuang Aluminum and China Aluminum International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Aluminum Inter and Shandong Hongchuang 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 Shandong Hongchuang Aluminum are associated (or correlated) with China Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Aluminum Inter has no effect on the direction of Shandong Hongchuang i.e., Shandong Hongchuang and China Aluminum go up and down completely randomly.
Pair Corralation between Shandong Hongchuang and China Aluminum
Assuming the 90 days trading horizon Shandong Hongchuang Aluminum is expected to generate 2.67 times more return on investment than China Aluminum. However, Shandong Hongchuang is 2.67 times more volatile than China Aluminum International. It trades about 0.16 of its potential returns per unit of risk. China Aluminum International is currently generating about -0.26 per unit of risk. If you would invest 897.00 in Shandong Hongchuang Aluminum on October 28, 2024 and sell it today you would earn a total of 112.00 from holding Shandong Hongchuang Aluminum or generate 12.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Shandong Hongchuang Aluminum vs. China Aluminum International
Performance |
| Timeline |
| Shandong Hongchuang |
| China Aluminum Inter |
Shandong Hongchuang and China Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Hongchuang and China Aluminum
The main advantage of trading using opposite Shandong Hongchuang and China Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Hongchuang position performs unexpectedly, China Aluminum 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 China Aluminum will offset losses from the drop in China Aluminum's long position.| Shandong Hongchuang vs. Zijin Mining Group | Shandong Hongchuang vs. Wanhua Chemical Group | Shandong Hongchuang vs. Baoshan Iron Steel | Shandong Hongchuang vs. Shandong Gold Mining |
| China Aluminum vs. Industrial and Commercial | China Aluminum vs. China Construction Bank | China Aluminum vs. Agricultural Bank of | China Aluminum vs. Bank of China |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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