Correlation Between China Aluminum and Western Mining
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By analyzing existing cross correlation between China Aluminum International and Western Mining Co, you can compare the effects of market volatilities on China Aluminum and Western Mining 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 Western Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Aluminum and Western Mining.
Diversification Opportunities for China Aluminum and Western Mining
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Western is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding China Aluminum International and Western Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Mining 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 Western Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Mining has no effect on the direction of China Aluminum i.e., China Aluminum and Western Mining go up and down completely randomly.
Pair Corralation between China Aluminum and Western Mining
Assuming the 90 days trading horizon China Aluminum International is expected to under-perform the Western Mining. In addition to that, China Aluminum is 1.13 times more volatile than Western Mining Co. It trades about -0.01 of its total potential returns per unit of risk. Western Mining Co is currently generating about 0.06 per unit of volatility. If you would invest 1,029 in Western Mining Co on October 14, 2024 and sell it today you would earn a total of 677.00 from holding Western Mining Co or generate 65.79% 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. Western Mining Co
Performance |
| Timeline |
| China Aluminum Inter |
| Western Mining |
China Aluminum and Western Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Aluminum and Western Mining
The main advantage of trading using opposite China Aluminum and Western Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Aluminum position performs unexpectedly, Western Mining 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 Western Mining will offset losses from the drop in Western Mining's long position.| China Aluminum vs. Meinian Onehealth Healthcare | China Aluminum vs. Anhui Huaren Health | China Aluminum vs. Shandong Hongchuang Aluminum | China Aluminum vs. CITIC Metal Co |
| Western Mining vs. CITIC Metal Co | Western Mining vs. China Aluminum International | Western Mining vs. Zhejiang Yongjin Metal | Western Mining vs. Shandong Hongchuang Aluminum |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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