Correlation Between China Aluminum and Northern United
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By analyzing existing cross correlation between China Aluminum International and Northern United Publishing, you can compare the effects of market volatilities on China Aluminum and Northern United 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 Northern United. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Aluminum and Northern United.
Diversification Opportunities for China Aluminum and Northern United
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Northern is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding China Aluminum International and Northern United Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern United Publ 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 Northern United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern United Publ has no effect on the direction of China Aluminum i.e., China Aluminum and Northern United go up and down completely randomly.
Pair Corralation between China Aluminum and Northern United
Assuming the 90 days trading horizon China Aluminum International is expected to under-perform the Northern United. But the stock apears to be less risky and, when comparing its historical volatility, China Aluminum International is 1.45 times less risky than Northern United. The stock trades about -0.17 of its potential returns per unit of risk. The Northern United Publishing is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 627.00 in Northern United Publishing on November 1, 2024 and sell it today you would earn a total of 25.00 from holding Northern United Publishing or generate 3.99% 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. Northern United Publishing
Performance |
| Timeline |
| China Aluminum Inter |
| Northern United Publ |
China Aluminum and Northern United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Aluminum and Northern United
The main advantage of trading using opposite China Aluminum and Northern United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Aluminum position performs unexpectedly, Northern United 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 Northern United will offset losses from the drop in Northern United's long position.| China Aluminum vs. Zhongfu Information | China Aluminum vs. Northking Information Technology | China Aluminum vs. Linewell Software Co | China Aluminum vs. Jinhe Biotechnology Co |
| Northern United vs. China Eastern Airlines | Northern United vs. Cicc Fund Management | Northern United vs. Innovative Medical Management | Northern United vs. China Aluminum International |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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