Correlation Between Shenzhen SDG and Aluminum Corp
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By analyzing existing cross correlation between Shenzhen SDG Service and Aluminum Corp of, you can compare the effects of market volatilities on Shenzhen SDG 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 Shenzhen SDG with a short position of Aluminum Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen SDG and Aluminum Corp.
Diversification Opportunities for Shenzhen SDG and Aluminum Corp
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Aluminum is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen SDG Service and Aluminum Corp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminum Corp and Shenzhen SDG 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 Shenzhen SDG Service 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 Shenzhen SDG i.e., Shenzhen SDG and Aluminum Corp go up and down completely randomly.
Pair Corralation between Shenzhen SDG and Aluminum Corp
Assuming the 90 days trading horizon Shenzhen SDG Service is expected to under-perform the Aluminum Corp. In addition to that, Shenzhen SDG is 1.72 times more volatile than Aluminum Corp of. It trades about -0.14 of its total potential returns per unit of risk. Aluminum Corp of is currently generating about 0.2 per unit of volatility. If you would invest 728.00 in Aluminum Corp of on October 28, 2024 and sell it today you would earn a total of 59.00 from holding Aluminum Corp of or generate 8.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen SDG Service vs. Aluminum Corp of
Performance |
| Timeline |
| Shenzhen SDG Service |
| Aluminum Corp |
Shenzhen SDG and Aluminum Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen SDG and Aluminum Corp
The main advantage of trading using opposite Shenzhen SDG and Aluminum Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen SDG 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.| Shenzhen SDG vs. Agricultural Bank of | Shenzhen SDG vs. Industrial and Commercial | Shenzhen SDG vs. Bank of China | Shenzhen SDG vs. China Construction Bank |
| Aluminum Corp vs. Zijin Mining Group | Aluminum Corp vs. Wanhua Chemical Group | Aluminum Corp vs. Baoshan Iron Steel | Aluminum Corp vs. Shandong Gold Mining |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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