Correlation Between Tianshan Aluminum and North Copper
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By analyzing existing cross correlation between Tianshan Aluminum Group and North Copper Shanxi, you can compare the effects of market volatilities on Tianshan Aluminum and North Copper 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 Tianshan Aluminum with a short position of North Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianshan Aluminum and North Copper.
Diversification Opportunities for Tianshan Aluminum and North Copper
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tianshan and North is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Tianshan Aluminum Group and North Copper Shanxi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Copper Shanxi and Tianshan Aluminum 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 Tianshan Aluminum Group are associated (or correlated) with North Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Copper Shanxi has no effect on the direction of Tianshan Aluminum i.e., Tianshan Aluminum and North Copper go up and down completely randomly.
Pair Corralation between Tianshan Aluminum and North Copper
Assuming the 90 days trading horizon Tianshan Aluminum Group is expected to generate 0.5 times more return on investment than North Copper. However, Tianshan Aluminum Group is 1.98 times less risky than North Copper. It trades about 0.15 of its potential returns per unit of risk. North Copper Shanxi is currently generating about 0.04 per unit of risk. If you would invest 803.00 in Tianshan Aluminum Group on October 26, 2024 and sell it today you would earn a total of 77.00 from holding Tianshan Aluminum Group or generate 9.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianshan Aluminum Group vs. North Copper Shanxi
Performance |
| Timeline |
| Tianshan Aluminum |
| North Copper Shanxi |
Tianshan Aluminum and North Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianshan Aluminum and North Copper
The main advantage of trading using opposite Tianshan Aluminum and North Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianshan Aluminum position performs unexpectedly, North Copper 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 North Copper will offset losses from the drop in North Copper's long position.| Tianshan Aluminum vs. China State Construction | Tianshan Aluminum vs. Poly Real Estate | Tianshan Aluminum vs. China Vanke Co | Tianshan Aluminum vs. China Merchants Shekou |
| North Copper vs. Aluminum Corp of | North Copper vs. Sino Platinum Metals Co | North Copper vs. Tianshan Aluminum Group | North Copper vs. Vanfund Urban Investment |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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