Correlation Between Aluminum Corp and Fuda Alloy
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By analyzing existing cross correlation between Aluminum Corp of and Fuda Alloy Materials, you can compare the effects of market volatilities on Aluminum Corp and Fuda Alloy 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 Fuda Alloy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminum Corp and Fuda Alloy.
Diversification Opportunities for Aluminum Corp and Fuda Alloy
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aluminum and Fuda is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum Corp of and Fuda Alloy Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuda Alloy Materials 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 Fuda Alloy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuda Alloy Materials has no effect on the direction of Aluminum Corp i.e., Aluminum Corp and Fuda Alloy go up and down completely randomly.
Pair Corralation between Aluminum Corp and Fuda Alloy
Assuming the 90 days trading horizon Aluminum Corp of is expected to under-perform the Fuda Alloy. But the stock apears to be less risky and, when comparing its historical volatility, Aluminum Corp of is 1.03 times less risky than Fuda Alloy. The stock trades about -0.21 of its potential returns per unit of risk. The Fuda Alloy Materials is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 1,411 in Fuda Alloy Materials on August 28, 2024 and sell it today you would lose (70.00) from holding Fuda Alloy Materials or give up 4.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aluminum Corp of vs. Fuda Alloy Materials
Performance |
| Timeline |
| Aluminum Corp |
| Fuda Alloy Materials |
Aluminum Corp and Fuda Alloy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminum Corp and Fuda Alloy
The main advantage of trading using opposite Aluminum Corp and Fuda Alloy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminum Corp position performs unexpectedly, Fuda Alloy 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 Fuda Alloy will offset losses from the drop in Fuda Alloy'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 |
| Fuda Alloy vs. Hangzhou Pinming Software | Fuda Alloy vs. China National Software | Fuda Alloy vs. Contec Medical Systems | Fuda Alloy vs. Shenzhen Glory Medical |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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