Correlation Between Wuhan Yangtze and China Aluminum
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By analyzing existing cross correlation between Wuhan Yangtze Communication and China Aluminum International, you can compare the effects of market volatilities on Wuhan Yangtze 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 Wuhan Yangtze with a short position of China Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and China Aluminum.
Diversification Opportunities for Wuhan Yangtze and China Aluminum
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Wuhan and China is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication 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 Wuhan Yangtze 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 Wuhan Yangtze Communication 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 Wuhan Yangtze i.e., Wuhan Yangtze and China Aluminum go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and China Aluminum
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to generate 2.36 times more return on investment than China Aluminum. However, Wuhan Yangtze is 2.36 times more volatile than China Aluminum International. It trades about -0.04 of its potential returns per unit of risk. China Aluminum International is currently generating about -0.22 per unit of risk. If you would invest 2,391 in Wuhan Yangtze Communication on October 30, 2024 and sell it today you would lose (98.00) from holding Wuhan Yangtze Communication or give up 4.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuhan Yangtze Communication vs. China Aluminum International
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| China Aluminum Inter |
Wuhan Yangtze and China Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and China Aluminum
The main advantage of trading using opposite Wuhan Yangtze and China Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze 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.| Wuhan Yangtze vs. Bus Online Co | Wuhan Yangtze vs. Holitech Technology Co | Wuhan Yangtze vs. Gome Telecom Equipment | Wuhan Yangtze vs. Cultural Investment Holdings |
| China Aluminum vs. Industrial and Commercial | China Aluminum vs. China Construction Bank | China Aluminum vs. Agricultural Bank of | China Aluminum vs. Bank of China |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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