Correlation Between Ningbo Thermal and China Aluminum
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By analyzing existing cross correlation between Ningbo Thermal Power and China Aluminum International, you can compare the effects of market volatilities on Ningbo Thermal 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 Ningbo Thermal with a short position of China Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Thermal and China Aluminum.
Diversification Opportunities for Ningbo Thermal and China Aluminum
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ningbo and China is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Thermal Power 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 Ningbo Thermal 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 Ningbo Thermal Power 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 Ningbo Thermal i.e., Ningbo Thermal and China Aluminum go up and down completely randomly.
Pair Corralation between Ningbo Thermal and China Aluminum
Assuming the 90 days trading horizon Ningbo Thermal is expected to generate 7.87 times less return on investment than China Aluminum. But when comparing it to its historical volatility, Ningbo Thermal Power is 1.48 times less risky than China Aluminum. It trades about 0.0 of its potential returns per unit of risk. China Aluminum International is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 470.00 in China Aluminum International on September 4, 2024 and sell it today you would earn a total of 20.00 from holding China Aluminum International or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Thermal Power vs. China Aluminum International
Performance |
| Timeline |
| Ningbo Thermal Power |
| China Aluminum Inter |
Ningbo Thermal and China Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Thermal and China Aluminum
The main advantage of trading using opposite Ningbo Thermal and China Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Thermal 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.| Ningbo Thermal vs. Cultural Investment Holdings | Ningbo Thermal vs. Gome Telecom Equipment | Ningbo Thermal vs. Bus Online Co | Ningbo Thermal vs. Holitech Technology Co |
| China Aluminum vs. Shanghai Yanpu Metal | China Aluminum vs. Ningbo Thermal Power | China Aluminum vs. Ningbo MedicalSystem Biotechnology | China Aluminum vs. China Nonferrous Metal |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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