Correlation Between Aluminumof China and Amalphi Ag
Can any of the company-specific risk be diversified away by investing in both Aluminumof China and Amalphi Ag 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 Amalphi Ag into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluminum of and amalphi ag, you can compare the effects of market volatilities on Aluminumof China and Amalphi Ag 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 Amalphi Ag. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminumof China and Amalphi Ag.
Diversification Opportunities for Aluminumof China and Amalphi Ag
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aluminumof and Amalphi is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum of and amalphi ag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on amalphi ag 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 Amalphi Ag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of amalphi ag has no effect on the direction of Aluminumof China i.e., Aluminumof China and Amalphi Ag go up and down completely randomly.
Pair Corralation between Aluminumof China and Amalphi Ag
Assuming the 90 days horizon Aluminumof China is expected to generate 1.17 times less return on investment than Amalphi Ag. But when comparing it to its historical volatility, Aluminum of is 4.1 times less risky than Amalphi Ag. It trades about 0.24 of its potential returns per unit of risk. amalphi ag is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 60.00 in amalphi ag on October 24, 2024 and sell it today you would earn a total of 1.00 from holding amalphi ag or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aluminum of vs. amalphi ag
Performance |
| Timeline |
| Aluminumof China |
| amalphi ag |
Aluminumof China and Amalphi Ag Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminumof China and Amalphi Ag
The main advantage of trading using opposite Aluminumof China and Amalphi Ag positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminumof China position performs unexpectedly, Amalphi Ag 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 Amalphi Ag will offset losses from the drop in Amalphi Ag's long position.| Aluminumof China vs. Harmony Gold Mining | Aluminumof China vs. THRACE PLASTICS | Aluminumof China vs. Vulcan Materials | Aluminumof China vs. Scandinavian Tobacco Group |
| Amalphi Ag vs. VULCAN MATERIALS | Amalphi Ag vs. GOODYEAR T RUBBER | Amalphi Ag vs. INDOFOOD AGRI RES | Amalphi Ag vs. APPLIED MATERIALS |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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