Correlation Between Minmetals Capital and AECC Aviation
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By analyzing existing cross correlation between Minmetals Capital Co and AECC Aviation Power, you can compare the effects of market volatilities on Minmetals Capital and AECC Aviation 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 Minmetals Capital with a short position of AECC Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minmetals Capital and AECC Aviation.
Diversification Opportunities for Minmetals Capital and AECC Aviation
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Minmetals and AECC is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Minmetals Capital Co and AECC Aviation Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AECC Aviation Power and Minmetals Capital 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 Minmetals Capital Co are associated (or correlated) with AECC Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AECC Aviation Power has no effect on the direction of Minmetals Capital i.e., Minmetals Capital and AECC Aviation go up and down completely randomly.
Pair Corralation between Minmetals Capital and AECC Aviation
Assuming the 90 days trading horizon Minmetals Capital Co is expected to generate 1.45 times more return on investment than AECC Aviation. However, Minmetals Capital is 1.45 times more volatile than AECC Aviation Power. It trades about 0.06 of its potential returns per unit of risk. AECC Aviation Power is currently generating about 0.02 per unit of risk. If you would invest 506.00 in Minmetals Capital Co on September 15, 2024 and sell it today you would earn a total of 199.00 from holding Minmetals Capital Co or generate 39.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.62% |
| Values | Daily Returns |
Minmetals Capital Co vs. AECC Aviation Power
Performance |
| Timeline |
| Minmetals Capital |
| AECC Aviation Power |
Minmetals Capital and AECC Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minmetals Capital and AECC Aviation
The main advantage of trading using opposite Minmetals Capital and AECC Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minmetals Capital position performs unexpectedly, AECC Aviation 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 AECC Aviation will offset losses from the drop in AECC Aviation's long position.The idea behind Minmetals Capital Co and AECC Aviation Power pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stocks Directory module to find actively traded stocks across global markets.
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