Correlation Between China Aluminum and Zhejiang Huatong
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By analyzing existing cross correlation between China Aluminum International and Zhejiang Huatong Meat, you can compare the effects of market volatilities on China Aluminum and Zhejiang Huatong 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 Zhejiang Huatong. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Aluminum and Zhejiang Huatong.
Diversification Opportunities for China Aluminum and Zhejiang Huatong
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Zhejiang is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding China Aluminum International and Zhejiang Huatong Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Huatong Meat 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 Zhejiang Huatong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Huatong Meat has no effect on the direction of China Aluminum i.e., China Aluminum and Zhejiang Huatong go up and down completely randomly.
Pair Corralation between China Aluminum and Zhejiang Huatong
Assuming the 90 days trading horizon China Aluminum International is expected to under-perform the Zhejiang Huatong. But the stock apears to be less risky and, when comparing its historical volatility, China Aluminum International is 1.81 times less risky than Zhejiang Huatong. The stock trades about -0.13 of its potential returns per unit of risk. The Zhejiang Huatong Meat is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,266 in Zhejiang Huatong Meat on September 25, 2024 and sell it today you would earn a total of 19.00 from holding Zhejiang Huatong Meat or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Aluminum International vs. Zhejiang Huatong Meat
Performance |
| Timeline |
| China Aluminum Inter |
| Zhejiang Huatong Meat |
China Aluminum and Zhejiang Huatong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Aluminum and Zhejiang Huatong
The main advantage of trading using opposite China Aluminum and Zhejiang Huatong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Aluminum position performs unexpectedly, Zhejiang Huatong 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 Zhejiang Huatong will offset losses from the drop in Zhejiang Huatong's long position.| China Aluminum vs. Ming Yang Smart | China Aluminum vs. 159681 | China Aluminum vs. 159005 | China Aluminum vs. Loctek Ergonomic Technology |
| Zhejiang Huatong vs. Ming Yang Smart | Zhejiang Huatong vs. 159681 | Zhejiang Huatong vs. 159005 | Zhejiang Huatong 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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