Correlation Between ARISTOCRAT LEISURE and CHINA OIL
Can any of the company-specific risk be diversified away by investing in both ARISTOCRAT LEISURE and CHINA OIL at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ARISTOCRAT LEISURE and CHINA OIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARISTOCRAT LEISURE and CHINA OIL AND, you can compare the effects of market volatilities on ARISTOCRAT LEISURE and CHINA OIL 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 ARISTOCRAT LEISURE with a short position of CHINA OIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARISTOCRAT LEISURE and CHINA OIL.
Diversification Opportunities for ARISTOCRAT LEISURE and CHINA OIL
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between ARISTOCRAT and CHINA is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding ARISTOCRAT LEISURE and CHINA OIL AND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA OIL AND and ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE are associated (or correlated) with CHINA OIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA OIL AND has no effect on the direction of ARISTOCRAT LEISURE i.e., ARISTOCRAT LEISURE and CHINA OIL go up and down completely randomly.
Pair Corralation between ARISTOCRAT LEISURE and CHINA OIL
If you would invest 2,206 in ARISTOCRAT LEISURE on November 29, 2024 and sell it today you would earn a total of 2,274 from holding ARISTOCRAT LEISURE or generate 103.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.2% |
| Values | Daily Returns |
ARISTOCRAT LEISURE vs. CHINA OIL AND
Performance |
| Timeline |
| ARISTOCRAT LEISURE |
| CHINA OIL AND |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
ARISTOCRAT LEISURE and CHINA OIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARISTOCRAT LEISURE and CHINA OIL
The main advantage of trading using opposite ARISTOCRAT LEISURE and CHINA OIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARISTOCRAT LEISURE position performs unexpectedly, CHINA OIL 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 OIL will offset losses from the drop in CHINA OIL's long position.| ARISTOCRAT LEISURE vs. ANGANG STEEL H | ARISTOCRAT LEISURE vs. FUYO GENERAL LEASE | ARISTOCRAT LEISURE vs. Tianjin Capital Environmental | ARISTOCRAT LEISURE vs. Air Lease |
| CHINA OIL vs. THAI BEVERAGE | CHINA OIL vs. National Beverage Corp | CHINA OIL vs. Summit Hotel Properties | CHINA OIL vs. MELIA HOTELS |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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