Correlation Between Choil Aluminum and Maniker F
Can any of the company-specific risk be diversified away by investing in both Choil Aluminum and Maniker F at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Choil Aluminum and Maniker F into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choil Aluminum and Maniker F G, you can compare the effects of market volatilities on Choil Aluminum and Maniker F 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 Choil Aluminum with a short position of Maniker F. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choil Aluminum and Maniker F.
Diversification Opportunities for Choil Aluminum and Maniker F
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Choil and Maniker is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Choil Aluminum and Maniker F G in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maniker F G and Choil 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 Choil Aluminum are associated (or correlated) with Maniker F. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maniker F G has no effect on the direction of Choil Aluminum i.e., Choil Aluminum and Maniker F go up and down completely randomly.
Pair Corralation between Choil Aluminum and Maniker F
Assuming the 90 days trading horizon Choil Aluminum is expected to under-perform the Maniker F. In addition to that, Choil Aluminum is 1.45 times more volatile than Maniker F G. It trades about -0.09 of its total potential returns per unit of risk. Maniker F G is currently generating about -0.04 per unit of volatility. If you would invest 293,500 in Maniker F G on September 2, 2024 and sell it today you would lose (14,000) from holding Maniker F G or give up 4.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choil Aluminum vs. Maniker F G
Performance |
| Timeline |
| Choil Aluminum |
| Maniker F G |
Choil Aluminum and Maniker F Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choil Aluminum and Maniker F
The main advantage of trading using opposite Choil Aluminum and Maniker F positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choil Aluminum position performs unexpectedly, Maniker F 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 Maniker F will offset losses from the drop in Maniker F's long position.| Choil Aluminum vs. Busan Industrial Co | Choil Aluminum vs. Busan Ind | Choil Aluminum vs. Mirae Asset Daewoo | Choil Aluminum vs. Finebesteel |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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