Correlation Between Aluminum Corp and Zotye Automobile
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By analyzing existing cross correlation between Aluminum Corp of and Zotye Automobile Co, you can compare the effects of market volatilities on Aluminum Corp and Zotye Automobile 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 Aluminum Corp with a short position of Zotye Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminum Corp and Zotye Automobile.
Diversification Opportunities for Aluminum Corp and Zotye Automobile
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aluminum and Zotye is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum Corp of and Zotye Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zotye Automobile and Aluminum Corp 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 Aluminum Corp of are associated (or correlated) with Zotye Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zotye Automobile has no effect on the direction of Aluminum Corp i.e., Aluminum Corp and Zotye Automobile go up and down completely randomly.
Pair Corralation between Aluminum Corp and Zotye Automobile
Assuming the 90 days trading horizon Aluminum Corp of is expected to generate 0.54 times more return on investment than Zotye Automobile. However, Aluminum Corp of is 1.87 times less risky than Zotye Automobile. It trades about 0.2 of its potential returns per unit of risk. Zotye Automobile Co is currently generating about -0.29 per unit of risk. If you would invest 728.00 in Aluminum Corp of on October 28, 2024 and sell it today you would earn a total of 59.00 from holding Aluminum Corp of or generate 8.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aluminum Corp of vs. Zotye Automobile Co
Performance |
| Timeline |
| Aluminum Corp |
| Zotye Automobile |
Aluminum Corp and Zotye Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminum Corp and Zotye Automobile
The main advantage of trading using opposite Aluminum Corp and Zotye Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminum Corp position performs unexpectedly, Zotye Automobile 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 Zotye Automobile will offset losses from the drop in Zotye Automobile's long position.| Aluminum Corp vs. Zijin Mining Group | Aluminum Corp vs. Wanhua Chemical Group | Aluminum Corp vs. Baoshan Iron Steel | Aluminum Corp vs. Shandong Gold Mining |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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