Correlation Between ADRIATIC METALS and Aluminumof China
Can any of the company-specific risk be diversified away by investing in both ADRIATIC METALS and Aluminumof China 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 ADRIATIC METALS and Aluminumof China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADRIATIC METALS LS 013355 and Aluminum of, you can compare the effects of market volatilities on ADRIATIC METALS and Aluminumof China 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 ADRIATIC METALS with a short position of Aluminumof China. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADRIATIC METALS and Aluminumof China.
Diversification Opportunities for ADRIATIC METALS and Aluminumof China
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ADRIATIC and Aluminumof is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding ADRIATIC METALS LS 013355 and Aluminum of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminumof China and ADRIATIC METALS 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 ADRIATIC METALS LS 013355 are associated (or correlated) with Aluminumof China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminumof China has no effect on the direction of ADRIATIC METALS i.e., ADRIATIC METALS and Aluminumof China go up and down completely randomly.
Pair Corralation between ADRIATIC METALS and Aluminumof China
Assuming the 90 days trading horizon ADRIATIC METALS LS 013355 is expected to generate 0.55 times more return on investment than Aluminumof China. However, ADRIATIC METALS LS 013355 is 1.8 times less risky than Aluminumof China. It trades about -0.03 of its potential returns per unit of risk. Aluminum of is currently generating about -0.07 per unit of risk. If you would invest 248.00 in ADRIATIC METALS LS 013355 on August 25, 2024 and sell it today you would lose (8.00) from holding ADRIATIC METALS LS 013355 or give up 3.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ADRIATIC METALS LS 013355 vs. Aluminum of
Performance |
| Timeline |
| ADRIATIC METALS LS |
| Aluminumof China |
ADRIATIC METALS and Aluminumof China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADRIATIC METALS and Aluminumof China
The main advantage of trading using opposite ADRIATIC METALS and Aluminumof China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADRIATIC METALS position performs unexpectedly, Aluminumof China 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 Aluminumof China will offset losses from the drop in Aluminumof China's long position.| ADRIATIC METALS vs. Mineral Resources Limited | ADRIATIC METALS vs. NEXA RESOURCES SA | ADRIATIC METALS vs. Superior Plus Corp | ADRIATIC METALS vs. NMI Holdings |
| Aluminumof China vs. Materialise NV | Aluminumof China vs. Air Transport Services | Aluminumof China vs. Martin Marietta Materials | Aluminumof China vs. Summit Materials |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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