Correlation Between Henan Lantian and Yunnan Aluminium
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By analyzing existing cross correlation between Henan Lantian Gas and Yunnan Aluminium Co, you can compare the effects of market volatilities on Henan Lantian 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 Henan Lantian with a short position of Yunnan Aluminium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henan Lantian and Yunnan Aluminium.
Diversification Opportunities for Henan Lantian and Yunnan Aluminium
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Henan and Yunnan is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Henan Lantian Gas and Yunnan Aluminium Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunnan Aluminium and Henan Lantian 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 Henan Lantian Gas 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 Henan Lantian i.e., Henan Lantian and Yunnan Aluminium go up and down completely randomly.
Pair Corralation between Henan Lantian and Yunnan Aluminium
Assuming the 90 days trading horizon Henan Lantian Gas is expected to generate 0.67 times more return on investment than Yunnan Aluminium. However, Henan Lantian Gas is 1.49 times less risky than Yunnan Aluminium. It trades about 0.06 of its potential returns per unit of risk. Yunnan Aluminium Co is currently generating about 0.03 per unit of risk. If you would invest 786.00 in Henan Lantian Gas on August 24, 2024 and sell it today you would earn a total of 388.00 from holding Henan Lantian Gas or generate 49.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Henan Lantian Gas vs. Yunnan Aluminium Co
Performance |
| Timeline |
| Henan Lantian Gas |
| Yunnan Aluminium |
Henan Lantian and Yunnan Aluminium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henan Lantian and Yunnan Aluminium
The main advantage of trading using opposite Henan Lantian and Yunnan Aluminium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henan Lantian 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.| Henan Lantian vs. CICT Mobile Communication | Henan Lantian vs. Wuhan Yangtze Communication | Henan Lantian vs. Time Publishing and | Henan Lantian vs. Beijing Kaiwen Education |
| Yunnan Aluminium vs. Zhejiang Kingland Pipeline | Yunnan Aluminium vs. Xiangyang Automobile Bearing | Yunnan Aluminium vs. China Publishing Media | Yunnan Aluminium vs. Chinese Universe Publishing |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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