Correlation Between China Aluminum and Fuda Alloy
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By analyzing existing cross correlation between China Aluminum International and Fuda Alloy Materials, you can compare the effects of market volatilities on China Aluminum and Fuda Alloy 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 Fuda Alloy. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Aluminum and Fuda Alloy.
Diversification Opportunities for China Aluminum and Fuda Alloy
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and Fuda is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding China Aluminum International and Fuda Alloy Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuda Alloy Materials 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 Fuda Alloy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuda Alloy Materials has no effect on the direction of China Aluminum i.e., China Aluminum and Fuda Alloy go up and down completely randomly.
Pair Corralation between China Aluminum and Fuda Alloy
Assuming the 90 days trading horizon China Aluminum International is expected to under-perform the Fuda Alloy. But the stock apears to be less risky and, when comparing its historical volatility, China Aluminum International is 2.26 times less risky than Fuda Alloy. The stock trades about -0.46 of its potential returns per unit of risk. The Fuda Alloy Materials is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,376 in Fuda Alloy Materials on October 14, 2024 and sell it today you would lose (36.00) from holding Fuda Alloy Materials or give up 2.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Aluminum International vs. Fuda Alloy Materials
Performance |
| Timeline |
| China Aluminum Inter |
| Fuda Alloy Materials |
China Aluminum and Fuda Alloy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Aluminum and Fuda Alloy
The main advantage of trading using opposite China Aluminum and Fuda Alloy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Aluminum position performs unexpectedly, Fuda Alloy 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 Fuda Alloy will offset losses from the drop in Fuda Alloy'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 |
| Fuda Alloy vs. Holitech Technology Co | Fuda Alloy vs. Tongling Nonferrous Metals | Fuda Alloy vs. Kuangda Technology Group | Fuda Alloy 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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