Correlation Between China Aluminum and State Grid
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By analyzing existing cross correlation between China Aluminum International and State Grid InformationCommunication, you can compare the effects of market volatilities on China Aluminum and State Grid 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 State Grid. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Aluminum and State Grid.
Diversification Opportunities for China Aluminum and State Grid
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and State is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding China Aluminum International and State Grid InformationCommunic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Grid Informati 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 State Grid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Grid Informati has no effect on the direction of China Aluminum i.e., China Aluminum and State Grid go up and down completely randomly.
Pair Corralation between China Aluminum and State Grid
Assuming the 90 days trading horizon China Aluminum International is expected to under-perform the State Grid. But the stock apears to be less risky and, when comparing its historical volatility, China Aluminum International is 1.08 times less risky than State Grid. The stock trades about -0.31 of its potential returns per unit of risk. The State Grid InformationCommunication is currently generating about -0.26 of returns per unit of risk over similar time horizon. If you would invest 2,005 in State Grid InformationCommunication on October 18, 2024 and sell it today you would lose (199.00) from holding State Grid InformationCommunication or give up 9.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Aluminum International vs. State Grid InformationCommunic
Performance |
| Timeline |
| China Aluminum Inter |
| State Grid Informati |
China Aluminum and State Grid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Aluminum and State Grid
The main advantage of trading using opposite China Aluminum and State Grid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Aluminum position performs unexpectedly, State Grid 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 State Grid will offset losses from the drop in State Grid's long position.| China Aluminum vs. Dongfeng Automobile Co | China Aluminum vs. Qiaoyin Environmental Tech | China Aluminum vs. Wuhan Yangtze Communication | China Aluminum vs. Nanjing Putian Telecommunications |
| State Grid vs. Anhui Transport Consulting | State Grid vs. China Aluminum International | State Grid vs. Rising Nonferrous Metals | State Grid vs. Shanghai Yanpu 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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