Correlation Between Aluminumof China and FRACTAL GAMING
Can any of the company-specific risk be diversified away by investing in both Aluminumof China and FRACTAL GAMING 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 FRACTAL GAMING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluminum of and FRACTAL GAMING GROUP, you can compare the effects of market volatilities on Aluminumof China and FRACTAL GAMING 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 FRACTAL GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminumof China and FRACTAL GAMING.
Diversification Opportunities for Aluminumof China and FRACTAL GAMING
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aluminumof and FRACTAL is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum of and FRACTAL GAMING GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FRACTAL GAMING GROUP 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 FRACTAL GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FRACTAL GAMING GROUP has no effect on the direction of Aluminumof China i.e., Aluminumof China and FRACTAL GAMING go up and down completely randomly.
Pair Corralation between Aluminumof China and FRACTAL GAMING
Assuming the 90 days horizon Aluminum of is expected to generate 1.12 times more return on investment than FRACTAL GAMING. However, Aluminumof China is 1.12 times more volatile than FRACTAL GAMING GROUP. It trades about 0.05 of its potential returns per unit of risk. FRACTAL GAMING GROUP is currently generating about 0.04 per unit of risk. If you would invest 31.00 in Aluminum of on October 16, 2024 and sell it today you would earn a total of 27.00 from holding Aluminum of or generate 87.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Aluminum of vs. FRACTAL GAMING GROUP
Performance |
| Timeline |
| Aluminumof China |
| FRACTAL GAMING GROUP |
Aluminumof China and FRACTAL GAMING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminumof China and FRACTAL GAMING
The main advantage of trading using opposite Aluminumof China and FRACTAL GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminumof China position performs unexpectedly, FRACTAL GAMING 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 FRACTAL GAMING will offset losses from the drop in FRACTAL GAMING's long position.| Aluminumof China vs. CarsalesCom | Aluminumof China vs. Gol Intelligent Airlines | Aluminumof China vs. Commercial Vehicle Group | Aluminumof China vs. CNVISION MEDIA |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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