Correlation Between Fujian Longzhou and Yunnan Aluminium
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Yunnan Aluminium Co, you can compare the effects of market volatilities on Fujian Longzhou 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 Fujian Longzhou with a short position of Yunnan Aluminium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Yunnan Aluminium.
Diversification Opportunities for Fujian Longzhou and Yunnan Aluminium
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fujian and Yunnan is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Yunnan Aluminium Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunnan Aluminium and Fujian Longzhou 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 Fujian Longzhou Transportation 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 Fujian Longzhou i.e., Fujian Longzhou and Yunnan Aluminium go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Yunnan Aluminium
Assuming the 90 days trading horizon Fujian Longzhou Transportation is expected to under-perform the Yunnan Aluminium. In addition to that, Fujian Longzhou is 1.43 times more volatile than Yunnan Aluminium Co. It trades about -0.04 of its total potential returns per unit of risk. Yunnan Aluminium Co is currently generating about 0.37 per unit of volatility. If you would invest 1,417 in Yunnan Aluminium Co on October 22, 2024 and sell it today you would earn a total of 250.00 from holding Yunnan Aluminium Co or generate 17.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Longzhou Transportation vs. Yunnan Aluminium Co
Performance |
| Timeline |
| Fujian Longzhou Tran |
| Yunnan Aluminium |
Fujian Longzhou and Yunnan Aluminium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Yunnan Aluminium
The main advantage of trading using opposite Fujian Longzhou and Yunnan Aluminium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou 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.| Fujian Longzhou vs. Jiugui Liquor Co | Fujian Longzhou vs. Anhui Huaheng Biotechnology | Fujian Longzhou vs. Financial Street Holdings | Fujian Longzhou vs. Jinhui Liquor Co |
| Yunnan Aluminium vs. Fujian Longzhou Transportation | Yunnan Aluminium vs. Hunan TV Broadcast | Yunnan Aluminium vs. Dazhong Transportation Group | Yunnan Aluminium vs. China Minmetals Rare |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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