Correlation Between New Hope and Aluminum Corp
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By analyzing existing cross correlation between New Hope Dairy and Aluminum Corp of, you can compare the effects of market volatilities on New Hope and Aluminum Corp 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 New Hope with a short position of Aluminum Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Hope and Aluminum Corp.
Diversification Opportunities for New Hope and Aluminum Corp
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between New and Aluminum is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding New Hope Dairy and Aluminum Corp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminum Corp and New Hope 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 New Hope Dairy are associated (or correlated) with Aluminum Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminum Corp has no effect on the direction of New Hope i.e., New Hope and Aluminum Corp go up and down completely randomly.
Pair Corralation between New Hope and Aluminum Corp
Assuming the 90 days trading horizon New Hope Dairy is expected to generate 1.09 times more return on investment than Aluminum Corp. However, New Hope is 1.09 times more volatile than Aluminum Corp of. It trades about 0.23 of its potential returns per unit of risk. Aluminum Corp of is currently generating about 0.07 per unit of risk. If you would invest 798.00 in New Hope Dairy on August 28, 2024 and sell it today you would earn a total of 442.00 from holding New Hope Dairy or generate 55.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Hope Dairy vs. Aluminum Corp of
Performance |
| Timeline |
| New Hope Dairy |
| Aluminum Corp |
New Hope and Aluminum Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Hope and Aluminum Corp
The main advantage of trading using opposite New Hope and Aluminum Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Hope position performs unexpectedly, Aluminum Corp 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 Aluminum Corp will offset losses from the drop in Aluminum Corp's long position.| New Hope vs. China Petroleum Chemical | New Hope vs. PetroChina Co Ltd | New Hope vs. China State Construction | New Hope vs. China Railway Group |
| Aluminum Corp vs. Wanhua Chemical Group | Aluminum Corp vs. Shandong Gold Mining | Aluminum Corp vs. Rongsheng Petrochemical Co | Aluminum Corp vs. Inner Mongolia BaoTou |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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