Correlation Between Inner Mongolia and Yunnan Aluminium
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By analyzing existing cross correlation between Inner Mongolia BaoTou and Yunnan Aluminium Co, you can compare the effects of market volatilities on Inner Mongolia and Yunnan Aluminium 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 Inner Mongolia with a short position of Yunnan Aluminium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inner Mongolia and Yunnan Aluminium.
Diversification Opportunities for Inner Mongolia and Yunnan Aluminium
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Inner and Yunnan is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Inner Mongolia BaoTou and Yunnan Aluminium Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunnan Aluminium and Inner Mongolia 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 Inner Mongolia BaoTou are associated (or correlated) with Yunnan Aluminium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunnan Aluminium has no effect on the direction of Inner Mongolia i.e., Inner Mongolia and Yunnan Aluminium go up and down completely randomly.
Pair Corralation between Inner Mongolia and Yunnan Aluminium
Assuming the 90 days trading horizon Inner Mongolia BaoTou is expected to generate 1.55 times more return on investment than Yunnan Aluminium. However, Inner Mongolia is 1.55 times more volatile than Yunnan Aluminium Co. It trades about 0.14 of its potential returns per unit of risk. Yunnan Aluminium Co is currently generating about -0.17 per unit of risk. If you would invest 175.00 in Inner Mongolia BaoTou on August 27, 2024 and sell it today you would earn a total of 19.00 from holding Inner Mongolia BaoTou or generate 10.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inner Mongolia BaoTou vs. Yunnan Aluminium Co
Performance |
| Timeline |
| Inner Mongolia BaoTou |
| Yunnan Aluminium |
Inner Mongolia and Yunnan Aluminium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inner Mongolia and Yunnan Aluminium
The main advantage of trading using opposite Inner Mongolia and Yunnan Aluminium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inner Mongolia position performs unexpectedly, Yunnan Aluminium 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 Yunnan Aluminium will offset losses from the drop in Yunnan Aluminium's long position.| Inner Mongolia vs. Wanhua Chemical Group | Inner Mongolia vs. Shandong Gold Mining | Inner Mongolia vs. Rongsheng Petrochemical Co | Inner Mongolia vs. Jiangxi Ganfeng Lithium |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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