Correlation Between Aluminum Corp and Ningbo Construction
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By analyzing existing cross correlation between Aluminum Corp of and Ningbo Construction Co, you can compare the effects of market volatilities on Aluminum Corp and Ningbo Construction 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 Ningbo Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminum Corp and Ningbo Construction.
Diversification Opportunities for Aluminum Corp and Ningbo Construction
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aluminum and Ningbo is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum Corp of and Ningbo Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Construction 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 Ningbo Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Construction has no effect on the direction of Aluminum Corp i.e., Aluminum Corp and Ningbo Construction go up and down completely randomly.
Pair Corralation between Aluminum Corp and Ningbo Construction
Assuming the 90 days trading horizon Aluminum Corp of is expected to under-perform the Ningbo Construction. But the stock apears to be less risky and, when comparing its historical volatility, Aluminum Corp of is 1.63 times less risky than Ningbo Construction. The stock trades about -0.21 of its potential returns per unit of risk. The Ningbo Construction Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 428.00 in Ningbo Construction Co on August 29, 2024 and sell it today you would earn a total of 30.00 from holding Ningbo Construction Co or generate 7.01% 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. Ningbo Construction Co
Performance |
| Timeline |
| Aluminum Corp |
| Ningbo Construction |
Aluminum Corp and Ningbo Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminum Corp and Ningbo Construction
The main advantage of trading using opposite Aluminum Corp and Ningbo Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminum Corp position performs unexpectedly, Ningbo Construction 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 Ningbo Construction will offset losses from the drop in Ningbo Construction's long position.| Aluminum Corp vs. Wanhua Chemical Group | Aluminum Corp vs. Shandong Gold Mining | Aluminum Corp vs. Rongsheng Petrochemical Co | Aluminum Corp vs. Inner Mongolia BaoTou |
| Ningbo Construction vs. Ming Yang Smart | Ningbo Construction vs. 159681 | Ningbo Construction vs. 159005 | Ningbo Construction vs. Loctek Ergonomic Technology |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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