Correlation Between Aluminum Corp and Chengdu Kanghua
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By analyzing existing cross correlation between Aluminum Corp of and Chengdu Kanghua Biological, you can compare the effects of market volatilities on Aluminum Corp and Chengdu Kanghua 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 Chengdu Kanghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminum Corp and Chengdu Kanghua.
Diversification Opportunities for Aluminum Corp and Chengdu Kanghua
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aluminum and Chengdu is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum Corp of and Chengdu Kanghua Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Kanghua Biol 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 Chengdu Kanghua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Kanghua Biol has no effect on the direction of Aluminum Corp i.e., Aluminum Corp and Chengdu Kanghua go up and down completely randomly.
Pair Corralation between Aluminum Corp and Chengdu Kanghua
Assuming the 90 days trading horizon Aluminum Corp of is expected to generate 0.82 times more return on investment than Chengdu Kanghua. However, Aluminum Corp of is 1.22 times less risky than Chengdu Kanghua. It trades about 0.04 of its potential returns per unit of risk. Chengdu Kanghua Biological is currently generating about -0.03 per unit of risk. If you would invest 541.00 in Aluminum Corp of on November 5, 2024 and sell it today you would earn a total of 235.00 from holding Aluminum Corp of or generate 43.44% 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. Chengdu Kanghua Biological
Performance |
| Timeline |
| Aluminum Corp |
| Chengdu Kanghua Biol |
Aluminum Corp and Chengdu Kanghua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminum Corp and Chengdu Kanghua
The main advantage of trading using opposite Aluminum Corp and Chengdu Kanghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminum Corp position performs unexpectedly, Chengdu Kanghua 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 Chengdu Kanghua will offset losses from the drop in Chengdu Kanghua's long position.| Aluminum Corp vs. SSAW Hotels Resorts | Aluminum Corp vs. Shuhua Sports Co | Aluminum Corp vs. China Sports Industry | Aluminum Corp vs. Zhejiang Yongjin Metal |
| Chengdu Kanghua vs. Zhejiang Huatong Meat | Chengdu Kanghua vs. Jiangsu Financial Leasing | Chengdu Kanghua vs. Hubeiyichang Transportation Group | Chengdu Kanghua vs. China Sports Industry |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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