Correlation Between Aluminumof China and H World
Can any of the company-specific risk be diversified away by investing in both Aluminumof China and H World 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 H World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluminum of and H World Group, you can compare the effects of market volatilities on Aluminumof China and H World 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 H World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminumof China and H World.
Diversification Opportunities for Aluminumof China and H World
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aluminumof and CL4A is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum of and H World Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H World 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 H World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H World Group has no effect on the direction of Aluminumof China i.e., Aluminumof China and H World go up and down completely randomly.
Pair Corralation between Aluminumof China and H World
Assuming the 90 days horizon Aluminum of is expected to generate 1.26 times more return on investment than H World. However, Aluminumof China is 1.26 times more volatile than H World Group. It trades about 0.06 of its potential returns per unit of risk. H World Group is currently generating about 0.0 per unit of risk. If you would invest 25.00 in Aluminum of on September 14, 2024 and sell it today you would earn a total of 32.00 from holding Aluminum of or generate 128.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Aluminum of vs. H World Group
Performance |
| Timeline |
| Aluminumof China |
| H World Group |
Aluminumof China and H World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminumof China and H World
The main advantage of trading using opposite Aluminumof China and H World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminumof China position performs unexpectedly, H World 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 H World will offset losses from the drop in H World'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 |
| H World vs. Columbia Sportswear | H World vs. Aluminum of | H World vs. InPlay Oil Corp | H World vs. ARDAGH METAL PACDL 0001 |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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