Correlation Between Aluminumof China and COFCO Joycome
Can any of the company-specific risk be diversified away by investing in both Aluminumof China and COFCO Joycome 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 Aluminumof China and COFCO Joycome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluminum of and COFCO Joycome Foods, you can compare the effects of market volatilities on Aluminumof China and COFCO Joycome 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 Aluminumof China with a short position of COFCO Joycome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminumof China and COFCO Joycome.
Diversification Opportunities for Aluminumof China and COFCO Joycome
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aluminumof and COFCO is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum of and COFCO Joycome Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFCO Joycome Foods and Aluminumof China 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 of are associated (or correlated) with COFCO Joycome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFCO Joycome Foods has no effect on the direction of Aluminumof China i.e., Aluminumof China and COFCO Joycome go up and down completely randomly.
Pair Corralation between Aluminumof China and COFCO Joycome
Assuming the 90 days horizon Aluminum of is expected to generate 1.01 times more return on investment than COFCO Joycome. However, Aluminumof China is 1.01 times more volatile than COFCO Joycome Foods. It trades about 0.09 of its potential returns per unit of risk. COFCO Joycome Foods is currently generating about -0.23 per unit of risk. If you would invest 55.00 in Aluminum of on October 14, 2024 and sell it today you would earn a total of 2.00 from holding Aluminum of or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aluminum of vs. COFCO Joycome Foods
Performance |
| Timeline |
| Aluminumof China |
| COFCO Joycome Foods |
Aluminumof China and COFCO Joycome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminumof China and COFCO Joycome
The main advantage of trading using opposite Aluminumof China and COFCO Joycome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminumof China position performs unexpectedly, COFCO Joycome 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 COFCO Joycome will offset losses from the drop in COFCO Joycome's long position.| Aluminumof China vs. Stag Industrial | Aluminumof China vs. Kingdee International Software | Aluminumof China vs. Unity Software | Aluminumof China vs. USU Software AG |
| COFCO Joycome vs. Aluminum of | COFCO Joycome vs. JD SPORTS FASH | COFCO Joycome vs. Fortescue Metals Group | COFCO Joycome vs. Perseus Mining Limited |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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