Correlation Between Shanghai Pudong and China Aluminum
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By analyzing existing cross correlation between Shanghai Pudong Development and China Aluminum International, you can compare the effects of market volatilities on Shanghai Pudong 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 Shanghai Pudong with a short position of China Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Pudong and China Aluminum.
Diversification Opportunities for Shanghai Pudong and China Aluminum
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and China is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Pudong Development 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 Shanghai Pudong 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 Shanghai Pudong Development 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 Shanghai Pudong i.e., Shanghai Pudong and China Aluminum go up and down completely randomly.
Pair Corralation between Shanghai Pudong and China Aluminum
Assuming the 90 days trading horizon Shanghai Pudong Development is expected to under-perform the China Aluminum. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Pudong Development is 1.09 times less risky than China Aluminum. The stock trades about -0.22 of its potential returns per unit of risk. The China Aluminum International is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 498.00 in China Aluminum International on August 29, 2024 and sell it today you would lose (25.00) from holding China Aluminum International or give up 5.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Pudong Development vs. China Aluminum International
Performance |
| Timeline |
| Shanghai Pudong Deve |
| China Aluminum Inter |
Shanghai Pudong and China Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Pudong and China Aluminum
The main advantage of trading using opposite Shanghai Pudong and China Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Pudong 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.| Shanghai Pudong vs. Jiaozuo Wanfang Aluminum | Shanghai Pudong vs. Rising Nonferrous Metals | Shanghai Pudong vs. Zhongyin Babi Food | Shanghai Pudong vs. Xinjiang Tianrun Dairy |
| China Aluminum vs. Ming Yang Smart | China Aluminum vs. 159681 | China Aluminum vs. 159005 | China Aluminum vs. Loctek Ergonomic Technology |
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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