Correlation Between Guangzhou Ruoyuchen and Tianshan Aluminum
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By analyzing existing cross correlation between Guangzhou Ruoyuchen Information and Tianshan Aluminum Group, you can compare the effects of market volatilities on Guangzhou Ruoyuchen and Tianshan 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 Guangzhou Ruoyuchen with a short position of Tianshan Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Ruoyuchen and Tianshan Aluminum.
Diversification Opportunities for Guangzhou Ruoyuchen and Tianshan Aluminum
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guangzhou and Tianshan is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Ruoyuchen Informatio and Tianshan Aluminum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianshan Aluminum and Guangzhou Ruoyuchen 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 Guangzhou Ruoyuchen Information are associated (or correlated) with Tianshan Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianshan Aluminum has no effect on the direction of Guangzhou Ruoyuchen i.e., Guangzhou Ruoyuchen and Tianshan Aluminum go up and down completely randomly.
Pair Corralation between Guangzhou Ruoyuchen and Tianshan Aluminum
Assuming the 90 days trading horizon Guangzhou Ruoyuchen Information is expected to generate 2.45 times more return on investment than Tianshan Aluminum. However, Guangzhou Ruoyuchen is 2.45 times more volatile than Tianshan Aluminum Group. It trades about 0.21 of its potential returns per unit of risk. Tianshan Aluminum Group is currently generating about 0.04 per unit of risk. If you would invest 1,490 in Guangzhou Ruoyuchen Information on October 26, 2024 and sell it today you would earn a total of 1,151 from holding Guangzhou Ruoyuchen Information or generate 77.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Ruoyuchen Informatio vs. Tianshan Aluminum Group
Performance |
| Timeline |
| Guangzhou Ruoyuchen |
| Tianshan Aluminum |
Guangzhou Ruoyuchen and Tianshan Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Ruoyuchen and Tianshan Aluminum
The main advantage of trading using opposite Guangzhou Ruoyuchen and Tianshan Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Ruoyuchen position performs unexpectedly, Tianshan 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 Tianshan Aluminum will offset losses from the drop in Tianshan Aluminum's long position.| Guangzhou Ruoyuchen vs. China Petroleum Chemical | Guangzhou Ruoyuchen vs. PetroChina Co Ltd | Guangzhou Ruoyuchen vs. China State Construction | Guangzhou Ruoyuchen vs. China Railway Group |
| Tianshan Aluminum vs. China State Construction | Tianshan Aluminum vs. Poly Real Estate | Tianshan Aluminum vs. China Vanke Co | Tianshan Aluminum vs. China Merchants Shekou |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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