Correlation Between China Aluminum and Ningbo Thermal
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By analyzing existing cross correlation between China Aluminum International and Ningbo Thermal Power, you can compare the effects of market volatilities on China Aluminum and Ningbo Thermal 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 Ningbo Thermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Aluminum and Ningbo Thermal.
Diversification Opportunities for China Aluminum and Ningbo Thermal
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Ningbo is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding China Aluminum International and Ningbo Thermal Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Thermal Power 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 Ningbo Thermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Thermal Power has no effect on the direction of China Aluminum i.e., China Aluminum and Ningbo Thermal go up and down completely randomly.
Pair Corralation between China Aluminum and Ningbo Thermal
Assuming the 90 days trading horizon China Aluminum International is expected to under-perform the Ningbo Thermal. In addition to that, China Aluminum is 1.16 times more volatile than Ningbo Thermal Power. It trades about -0.04 of its total potential returns per unit of risk. Ningbo Thermal Power is currently generating about 0.09 per unit of volatility. If you would invest 390.00 in Ningbo Thermal Power on September 5, 2024 and sell it today you would earn a total of 11.00 from holding Ningbo Thermal Power or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Aluminum International vs. Ningbo Thermal Power
Performance |
| Timeline |
| China Aluminum Inter |
| Ningbo Thermal Power |
China Aluminum and Ningbo Thermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Aluminum and Ningbo Thermal
The main advantage of trading using opposite China Aluminum and Ningbo Thermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Aluminum position performs unexpectedly, Ningbo Thermal 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 Ningbo Thermal will offset losses from the drop in Ningbo Thermal's long position.| China Aluminum vs. China Life Insurance | China Aluminum vs. Cinda Securities Co | China Aluminum vs. Piotech Inc A | China Aluminum vs. Dongxing Sec Co |
| Ningbo Thermal vs. China Aluminum International | Ningbo Thermal vs. Aluminum Corp of | Ningbo Thermal vs. Guangdong Jingyi Metal | Ningbo Thermal vs. Zhejiang Yayi 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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