Correlation Between China Aluminum and Fujian Longzhou
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By analyzing existing cross correlation between China Aluminum International and Fujian Longzhou Transportation, you can compare the effects of market volatilities on China Aluminum and Fujian Longzhou 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 China Aluminum with a short position of Fujian Longzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Aluminum and Fujian Longzhou.
Diversification Opportunities for China Aluminum and Fujian Longzhou
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Fujian is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding China Aluminum International and Fujian Longzhou Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Longzhou Tran and China Aluminum 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 China Aluminum International are associated (or correlated) with Fujian Longzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Longzhou Tran has no effect on the direction of China Aluminum i.e., China Aluminum and Fujian Longzhou go up and down completely randomly.
Pair Corralation between China Aluminum and Fujian Longzhou
Assuming the 90 days trading horizon China Aluminum International is expected to generate 0.52 times more return on investment than Fujian Longzhou. However, China Aluminum International is 1.93 times less risky than Fujian Longzhou. It trades about -0.35 of its potential returns per unit of risk. Fujian Longzhou Transportation is currently generating about -0.37 per unit of risk. If you would invest 484.00 in China Aluminum International on October 11, 2024 and sell it today you would lose (61.00) from holding China Aluminum International or give up 12.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
China Aluminum International vs. Fujian Longzhou Transportation
Performance |
| Timeline |
| China Aluminum Inter |
| Fujian Longzhou Tran |
China Aluminum and Fujian Longzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Aluminum and Fujian Longzhou
The main advantage of trading using opposite China Aluminum and Fujian Longzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Aluminum position performs unexpectedly, Fujian Longzhou 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 Fujian Longzhou will offset losses from the drop in Fujian Longzhou's long position.| China Aluminum vs. Xiangpiaopiao Food Co | China Aluminum vs. Vanfund Urban Investment | China Aluminum vs. V V Food | China Aluminum vs. JuneYao Dairy Co |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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