Correlation Between Aluminumof China and JD HEALTH
Can any of the company-specific risk be diversified away by investing in both Aluminumof China and JD HEALTH 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 JD HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluminum of and JD HEALTH INTL, you can compare the effects of market volatilities on Aluminumof China and JD HEALTH 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 JD HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminumof China and JD HEALTH.
Diversification Opportunities for Aluminumof China and JD HEALTH
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aluminumof and 8ZN is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum of and JD HEALTH INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD HEALTH INTL 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 JD HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD HEALTH INTL has no effect on the direction of Aluminumof China i.e., Aluminumof China and JD HEALTH go up and down completely randomly.
Pair Corralation between Aluminumof China and JD HEALTH
Assuming the 90 days horizon Aluminum of is expected to generate 1.2 times more return on investment than JD HEALTH. However, Aluminumof China is 1.2 times more volatile than JD HEALTH INTL. It trades about 0.19 of its potential returns per unit of risk. JD HEALTH INTL is currently generating about 0.19 per unit of risk. If you would invest 55.00 in Aluminum of on November 6, 2024 and sell it today you would earn a total of 6.00 from holding Aluminum of or generate 10.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aluminum of vs. JD HEALTH INTL
Performance |
| Timeline |
| Aluminumof China |
| JD HEALTH INTL |
Aluminumof China and JD HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminumof China and JD HEALTH
The main advantage of trading using opposite Aluminumof China and JD HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminumof China position performs unexpectedly, JD HEALTH 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 JD HEALTH will offset losses from the drop in JD HEALTH's long position.| Aluminumof China vs. UNITED RENTALS | Aluminumof China vs. OFFICE DEPOT | Aluminumof China vs. BORR DRILLING NEW | Aluminumof China vs. SCANSOURCE |
| JD HEALTH vs. Fresenius SE Co | JD HEALTH vs. Option Care Health | JD HEALTH vs. HYGEIA HC HLDGS | JD HEALTH vs. MODIVCARE INC DL 001 |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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