Correlation Between Aluminumof China and SPECTRAL MEDICAL
Can any of the company-specific risk be diversified away by investing in both Aluminumof China and SPECTRAL MEDICAL 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 SPECTRAL MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluminum of and SPECTRAL MEDICAL, you can compare the effects of market volatilities on Aluminumof China and SPECTRAL MEDICAL 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 SPECTRAL MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminumof China and SPECTRAL MEDICAL.
Diversification Opportunities for Aluminumof China and SPECTRAL MEDICAL
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aluminumof and SPECTRAL is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum of and SPECTRAL MEDICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPECTRAL MEDICAL 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 SPECTRAL MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPECTRAL MEDICAL has no effect on the direction of Aluminumof China i.e., Aluminumof China and SPECTRAL MEDICAL go up and down completely randomly.
Pair Corralation between Aluminumof China and SPECTRAL MEDICAL
Assuming the 90 days horizon Aluminum of is expected to generate 0.71 times more return on investment than SPECTRAL MEDICAL. However, Aluminum of is 1.41 times less risky than SPECTRAL MEDICAL. It trades about 0.1 of its potential returns per unit of risk. SPECTRAL MEDICAL is currently generating about 0.0 per unit of risk. If you would invest 42.00 in Aluminum of on November 7, 2024 and sell it today you would earn a total of 19.00 from holding Aluminum of or generate 45.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Aluminum of vs. SPECTRAL MEDICAL
Performance |
| Timeline |
| Aluminumof China |
| SPECTRAL MEDICAL |
Aluminumof China and SPECTRAL MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminumof China and SPECTRAL MEDICAL
The main advantage of trading using opposite Aluminumof China and SPECTRAL MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminumof China position performs unexpectedly, SPECTRAL MEDICAL 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 SPECTRAL MEDICAL will offset losses from the drop in SPECTRAL MEDICAL's long position.| Aluminumof China vs. UNITED RENTALS | Aluminumof China vs. OFFICE DEPOT | Aluminumof China vs. BORR DRILLING NEW | Aluminumof China vs. SCANSOURCE |
| SPECTRAL MEDICAL vs. WuXi AppTec Co | SPECTRAL MEDICAL vs. Thermo Fisher Scientific | SPECTRAL MEDICAL vs. Danaher | SPECTRAL MEDICAL vs. Danaher |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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