Correlation Between Wuxi Lead and China Aluminum
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By analyzing existing cross correlation between Wuxi Lead Auto and China Aluminum International, you can compare the effects of market volatilities on Wuxi Lead and China 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 Wuxi Lead with a short position of China Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuxi Lead and China Aluminum.
Diversification Opportunities for Wuxi Lead and China Aluminum
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wuxi and China is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Wuxi Lead Auto and China Aluminum International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Aluminum Inter and Wuxi Lead 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 Wuxi Lead Auto are associated (or correlated) with China Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Aluminum Inter has no effect on the direction of Wuxi Lead i.e., Wuxi Lead and China Aluminum go up and down completely randomly.
Pair Corralation between Wuxi Lead and China Aluminum
Assuming the 90 days trading horizon Wuxi Lead Auto is expected to generate 3.58 times more return on investment than China Aluminum. However, Wuxi Lead is 3.58 times more volatile than China Aluminum International. It trades about 0.2 of its potential returns per unit of risk. China Aluminum International is currently generating about -0.09 per unit of risk. If you would invest 1,878 in Wuxi Lead Auto on September 1, 2024 and sell it today you would earn a total of 484.00 from holding Wuxi Lead Auto or generate 25.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Wuxi Lead Auto vs. China Aluminum International
Performance |
| Timeline |
| Wuxi Lead Auto |
| China Aluminum Inter |
Wuxi Lead and China Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuxi Lead and China Aluminum
The main advantage of trading using opposite Wuxi Lead and China Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuxi Lead position performs unexpectedly, China 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 China Aluminum will offset losses from the drop in China Aluminum's long position.| Wuxi Lead vs. Ningbo Tip Rubber | Wuxi Lead vs. Hainan Mining Co | Wuxi Lead vs. Hangzhou Gaoxin Rubber | Wuxi Lead vs. Tianjin Pengling Rubber |
| China Aluminum vs. Do Fluoride Chemicals Co | China Aluminum vs. Duzhe Publishing Media | China Aluminum vs. Harbin Hatou Investment | China Aluminum vs. Southern PublishingMedia Co |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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