Correlation Between Aluminum Corp and Linzhou Heavy
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By analyzing existing cross correlation between Aluminum Corp of and Linzhou Heavy Machinery, you can compare the effects of market volatilities on Aluminum Corp and Linzhou Heavy 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 Linzhou Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminum Corp and Linzhou Heavy.
Diversification Opportunities for Aluminum Corp and Linzhou Heavy
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aluminum and Linzhou is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum Corp of and Linzhou Heavy Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linzhou Heavy Machinery 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 Linzhou Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linzhou Heavy Machinery has no effect on the direction of Aluminum Corp i.e., Aluminum Corp and Linzhou Heavy go up and down completely randomly.
Pair Corralation between Aluminum Corp and Linzhou Heavy
Assuming the 90 days trading horizon Aluminum Corp of is expected to generate 0.79 times more return on investment than Linzhou Heavy. However, Aluminum Corp of is 1.27 times less risky than Linzhou Heavy. It trades about 0.07 of its potential returns per unit of risk. Linzhou Heavy Machinery is currently generating about 0.01 per unit of risk. If you would invest 523.00 in Aluminum Corp of on September 4, 2024 and sell it today you would earn a total of 236.00 from holding Aluminum Corp of or generate 45.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aluminum Corp of vs. Linzhou Heavy Machinery
Performance |
| Timeline |
| Aluminum Corp |
| Linzhou Heavy Machinery |
Aluminum Corp and Linzhou Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminum Corp and Linzhou Heavy
The main advantage of trading using opposite Aluminum Corp and Linzhou Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminum Corp position performs unexpectedly, Linzhou Heavy 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 Linzhou Heavy will offset losses from the drop in Linzhou Heavy's long position.| Aluminum Corp vs. Zijin Mining Group | Aluminum Corp vs. Wanhua Chemical Group | Aluminum Corp vs. Baoshan Iron Steel | Aluminum Corp vs. Rongsheng Petrochemical Co |
| Linzhou Heavy vs. Chengdu Kanghua Biological | Linzhou Heavy vs. Beijing Wantai Biological | Linzhou Heavy vs. Suzhou Novoprotein Scientific | Linzhou Heavy vs. Aluminum Corp of |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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