Correlation Between Changchun Faway and China Aluminum
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By analyzing existing cross correlation between Changchun Faway Automobile and China Aluminum International, you can compare the effects of market volatilities on Changchun Faway 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 Changchun Faway with a short position of China Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Faway and China Aluminum.
Diversification Opportunities for Changchun Faway and China Aluminum
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Changchun and China is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Faway Automobile 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 Changchun Faway 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 Changchun Faway Automobile 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 Changchun Faway i.e., Changchun Faway and China Aluminum go up and down completely randomly.
Pair Corralation between Changchun Faway and China Aluminum
Assuming the 90 days trading horizon Changchun Faway Automobile is expected to generate 1.5 times more return on investment than China Aluminum. However, Changchun Faway is 1.5 times more volatile than China Aluminum International. It trades about -0.01 of its potential returns per unit of risk. China Aluminum International is currently generating about -0.13 per unit of risk. If you would invest 951.00 in Changchun Faway Automobile on August 28, 2024 and sell it today you would lose (11.00) from holding Changchun Faway Automobile or give up 1.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun Faway Automobile vs. China Aluminum International
Performance |
| Timeline |
| Changchun Faway Auto |
| China Aluminum Inter |
Changchun Faway and China Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Faway and China Aluminum
The main advantage of trading using opposite Changchun Faway and China Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Faway 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.| Changchun Faway vs. Miracll Chemicals Co | Changchun Faway vs. Guangzhou KingTeller Technology | Changchun Faway vs. Nantong Jiangshan Agrochemical | Changchun Faway vs. Shanghai Jinfeng Wine |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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