Correlation Between Aluminum Corp and Sichuan Fulin
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By analyzing existing cross correlation between Aluminum Corp of and Sichuan Fulin Transportation, you can compare the effects of market volatilities on Aluminum Corp and Sichuan Fulin 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 Sichuan Fulin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminum Corp and Sichuan Fulin.
Diversification Opportunities for Aluminum Corp and Sichuan Fulin
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aluminum and Sichuan is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum Corp of and Sichuan Fulin Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Fulin Transp 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 Sichuan Fulin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Fulin Transp has no effect on the direction of Aluminum Corp i.e., Aluminum Corp and Sichuan Fulin go up and down completely randomly.
Pair Corralation between Aluminum Corp and Sichuan Fulin
Assuming the 90 days trading horizon Aluminum Corp of is expected to generate 0.88 times more return on investment than Sichuan Fulin. However, Aluminum Corp of is 1.14 times less risky than Sichuan Fulin. It trades about 0.05 of its potential returns per unit of risk. Sichuan Fulin Transportation is currently generating about 0.02 per unit of risk. If you would invest 525.00 in Aluminum Corp of on November 7, 2024 and sell it today you would earn a total of 251.00 from holding Aluminum Corp of or generate 47.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aluminum Corp of vs. Sichuan Fulin Transportation
Performance |
| Timeline |
| Aluminum Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sichuan Fulin Transp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Aluminum Corp and Sichuan Fulin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminum Corp and Sichuan Fulin
The main advantage of trading using opposite Aluminum Corp and Sichuan Fulin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminum Corp position performs unexpectedly, Sichuan Fulin 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 Sichuan Fulin will offset losses from the drop in Sichuan Fulin's long position.The idea behind Aluminum Corp of and Sichuan Fulin Transportation pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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