Correlation Between Hefei Metalforming and Yunnan Aluminium
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By analyzing existing cross correlation between Hefei Metalforming Mach and Yunnan Aluminium Co, you can compare the effects of market volatilities on Hefei Metalforming and Yunnan Aluminium 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 Hefei Metalforming with a short position of Yunnan Aluminium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hefei Metalforming and Yunnan Aluminium.
Diversification Opportunities for Hefei Metalforming and Yunnan Aluminium
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hefei and Yunnan is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Hefei Metalforming Mach and Yunnan Aluminium Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunnan Aluminium and Hefei Metalforming 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 Hefei Metalforming Mach are associated (or correlated) with Yunnan Aluminium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunnan Aluminium has no effect on the direction of Hefei Metalforming i.e., Hefei Metalforming and Yunnan Aluminium go up and down completely randomly.
Pair Corralation between Hefei Metalforming and Yunnan Aluminium
Assuming the 90 days trading horizon Hefei Metalforming Mach is expected to generate 1.46 times more return on investment than Yunnan Aluminium. However, Hefei Metalforming is 1.46 times more volatile than Yunnan Aluminium Co. It trades about 0.03 of its potential returns per unit of risk. Yunnan Aluminium Co is currently generating about 0.02 per unit of risk. If you would invest 647.00 in Hefei Metalforming Mach on August 31, 2024 and sell it today you would earn a total of 132.00 from holding Hefei Metalforming Mach or generate 20.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hefei Metalforming Mach vs. Yunnan Aluminium Co
Performance |
| Timeline |
| Hefei Metalforming Mach |
| Yunnan Aluminium |
Hefei Metalforming and Yunnan Aluminium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hefei Metalforming and Yunnan Aluminium
The main advantage of trading using opposite Hefei Metalforming and Yunnan Aluminium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hefei Metalforming position performs unexpectedly, Yunnan Aluminium 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 Yunnan Aluminium will offset losses from the drop in Yunnan Aluminium's long position.| Hefei Metalforming vs. China Publishing Media | Hefei Metalforming vs. Will Semiconductor Co | Hefei Metalforming vs. Guangzhou Jinyi Media | Hefei Metalforming vs. Threes Company Media |
| Yunnan Aluminium vs. Xinjiang Communications Construction | Yunnan Aluminium vs. Northern United Publishing | Yunnan Aluminium vs. Jonjee Hi tech Industrial | Yunnan Aluminium vs. Zhejiang JIULI Hi tech |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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