Correlation Between Linewell Software and China Aluminum
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By analyzing existing cross correlation between Linewell Software Co and China Aluminum International, you can compare the effects of market volatilities on Linewell Software and China Aluminum 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 Linewell Software with a short position of China Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linewell Software and China Aluminum.
Diversification Opportunities for Linewell Software and China Aluminum
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Linewell and China is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Linewell Software Co and China Aluminum International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Aluminum Inter and Linewell Software 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 Linewell Software Co are associated (or correlated) with China Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Aluminum Inter has no effect on the direction of Linewell Software i.e., Linewell Software and China Aluminum go up and down completely randomly.
Pair Corralation between Linewell Software and China Aluminum
Assuming the 90 days trading horizon Linewell Software Co is expected to generate 1.25 times more return on investment than China Aluminum. However, Linewell Software is 1.25 times more volatile than China Aluminum International. It trades about 0.01 of its potential returns per unit of risk. China Aluminum International is currently generating about -0.01 per unit of risk. If you would invest 1,559 in Linewell Software Co on November 9, 2024 and sell it today you would lose (159.00) from holding Linewell Software Co or give up 10.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Linewell Software Co vs. China Aluminum International
Performance |
| Timeline |
| Linewell Software |
Risk-Adjusted Performance
OK
Weak | Strong |
| China Aluminum Inter |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Linewell Software and China Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Linewell Software and China Aluminum
The main advantage of trading using opposite Linewell Software and China Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linewell Software position performs unexpectedly, China Aluminum 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 China Aluminum will offset losses from the drop in China Aluminum's long position.The idea behind Linewell Software Co and China Aluminum International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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