Correlation Between Aluminum Corp and Caihong Display
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By analyzing existing cross correlation between Aluminum Corp of and Caihong Display Devices, you can compare the effects of market volatilities on Aluminum Corp and Caihong Display 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 Caihong Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminum Corp and Caihong Display.
Diversification Opportunities for Aluminum Corp and Caihong Display
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aluminum and Caihong is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum Corp of and Caihong Display Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caihong Display Devices 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 Caihong Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caihong Display Devices has no effect on the direction of Aluminum Corp i.e., Aluminum Corp and Caihong Display go up and down completely randomly.
Pair Corralation between Aluminum Corp and Caihong Display
Assuming the 90 days trading horizon Aluminum Corp is expected to generate 1.38 times less return on investment than Caihong Display. But when comparing it to its historical volatility, Aluminum Corp of is 1.83 times less risky than Caihong Display. It trades about 0.26 of its potential returns per unit of risk. Caihong Display Devices is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 766.00 in Caihong Display Devices on November 6, 2024 and sell it today you would earn a total of 82.00 from holding Caihong Display Devices or generate 10.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aluminum Corp of vs. Caihong Display Devices
Performance |
| Timeline |
| Aluminum Corp |
| Caihong Display Devices |
Aluminum Corp and Caihong Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminum Corp and Caihong Display
The main advantage of trading using opposite Aluminum Corp and Caihong Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminum Corp position performs unexpectedly, Caihong Display 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 Caihong Display will offset losses from the drop in Caihong Display'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 |
| Caihong Display vs. Nanjing Putian Telecommunications | Caihong Display vs. Cloud Live Technology | Caihong Display vs. Shenzhen Coship Electronics | Caihong Display vs. Shenzhen Hifuture Electric |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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