Correlation Between Aluminumof China and Alumil Aluminium
Can any of the company-specific risk be diversified away by investing in both Aluminumof China and Alumil Aluminium 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 Alumil Aluminium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluminum of and Alumil Aluminium Industry, you can compare the effects of market volatilities on Aluminumof China and Alumil 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 Aluminumof China with a short position of Alumil Aluminium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminumof China and Alumil Aluminium.
Diversification Opportunities for Aluminumof China and Alumil Aluminium
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aluminumof and Alumil is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum of and Alumil Aluminium Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alumil Aluminium Industry 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 Alumil Aluminium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alumil Aluminium Industry has no effect on the direction of Aluminumof China i.e., Aluminumof China and Alumil Aluminium go up and down completely randomly.
Pair Corralation between Aluminumof China and Alumil Aluminium
Assuming the 90 days horizon Aluminum of is expected to generate 1.53 times more return on investment than Alumil Aluminium. However, Aluminumof China is 1.53 times more volatile than Alumil Aluminium Industry. It trades about 0.07 of its potential returns per unit of risk. Alumil Aluminium Industry is currently generating about 0.09 per unit of risk. If you would invest 34.00 in Aluminum of on September 14, 2024 and sell it today you would earn a total of 23.00 from holding Aluminum of or generate 67.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.64% |
| Values | Daily Returns |
Aluminum of vs. Alumil Aluminium Industry
Performance |
| Timeline |
| Aluminumof China |
| Alumil Aluminium Industry |
Aluminumof China and Alumil Aluminium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminumof China and Alumil Aluminium
The main advantage of trading using opposite Aluminumof China and Alumil Aluminium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminumof China position performs unexpectedly, Alumil 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 Alumil Aluminium will offset losses from the drop in Alumil Aluminium's long position.| Aluminumof China vs. Norsk Hydro ASA | Aluminumof China vs. Kaiser Aluminum | Aluminumof China vs. Superior Plus Corp | Aluminumof China vs. SIVERS SEMICONDUCTORS AB |
| Alumil Aluminium vs. Norsk Hydro ASA | Alumil Aluminium vs. Aluminum of | Alumil Aluminium vs. Kaiser Aluminum | Alumil Aluminium vs. Superior Plus Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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