Correlation Between China Hongqiao and Alumina Limited
Can any of the company-specific risk be diversified away by investing in both China Hongqiao and Alumina Limited 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 China Hongqiao and Alumina Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Hongqiao Group and Alumina Limited PK, you can compare the effects of market volatilities on China Hongqiao and Alumina Limited 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 China Hongqiao with a short position of Alumina Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Hongqiao and Alumina Limited.
Diversification Opportunities for China Hongqiao and Alumina Limited
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Alumina is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Hongqiao Group and Alumina Limited PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alumina Limited PK and China Hongqiao 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 China Hongqiao Group are associated (or correlated) with Alumina Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alumina Limited PK has no effect on the direction of China Hongqiao i.e., China Hongqiao and Alumina Limited go up and down completely randomly.
Pair Corralation between China Hongqiao and Alumina Limited
If you would invest (100.00) in Alumina Limited PK on November 18, 2024 and sell it today you would earn a total of 100.00 from holding Alumina Limited PK or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
China Hongqiao Group vs. Alumina Limited PK
Performance |
| Timeline |
| China Hongqiao Group |
| Alumina Limited PK |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
China Hongqiao and Alumina Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Hongqiao and Alumina Limited
The main advantage of trading using opposite China Hongqiao and Alumina Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Hongqiao position performs unexpectedly, Alumina Limited 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 Alumina Limited will offset losses from the drop in Alumina Limited's long position.| China Hongqiao vs. Kaiser Aluminum | China Hongqiao vs. Century Aluminum | China Hongqiao vs. Constellium Nv | China Hongqiao vs. Alcoa Corp |
| Alumina Limited vs. Anhui Conch Cement | Alumina Limited vs. Asahi Kaisei Corp | Alumina Limited vs. Covestro ADR |
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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