Correlation Between China Aluminum and Wonders Information
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By analyzing existing cross correlation between China Aluminum International and Wonders Information, you can compare the effects of market volatilities on China Aluminum and Wonders Information 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 Wonders Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Aluminum and Wonders Information.
Diversification Opportunities for China Aluminum and Wonders Information
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Wonders is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding China Aluminum International and Wonders Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonders Information 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 Wonders Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonders Information has no effect on the direction of China Aluminum i.e., China Aluminum and Wonders Information go up and down completely randomly.
Pair Corralation between China Aluminum and Wonders Information
Assuming the 90 days trading horizon China Aluminum International is expected to under-perform the Wonders Information. But the stock apears to be less risky and, when comparing its historical volatility, China Aluminum International is 1.96 times less risky than Wonders Information. The stock trades about 0.0 of its potential returns per unit of risk. The Wonders Information is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 709.00 in Wonders Information on November 7, 2024 and sell it today you would earn a total of 3.00 from holding Wonders Information or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Aluminum International vs. Wonders Information
Performance |
| Timeline |
| China Aluminum Inter |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Wonders Information |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
China Aluminum and Wonders Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Aluminum and Wonders Information
The main advantage of trading using opposite China Aluminum and Wonders Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Aluminum position performs unexpectedly, Wonders Information 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 Wonders Information will offset losses from the drop in Wonders Information's long position.The idea behind China Aluminum International and Wonders Information 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.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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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