Correlation Between COSCO SHIPPING and Aluminumof China
Can any of the company-specific risk be diversified away by investing in both COSCO SHIPPING and Aluminumof China 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 COSCO SHIPPING and Aluminumof China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COSCO SHIPPING Holdings and Aluminum of, you can compare the effects of market volatilities on COSCO SHIPPING and Aluminumof China 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 COSCO SHIPPING with a short position of Aluminumof China. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSCO SHIPPING and Aluminumof China.
Diversification Opportunities for COSCO SHIPPING and Aluminumof China
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COSCO and Aluminumof is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding COSCO SHIPPING Holdings and Aluminum of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminumof China and COSCO SHIPPING 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 COSCO SHIPPING Holdings are associated (or correlated) with Aluminumof China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminumof China has no effect on the direction of COSCO SHIPPING i.e., COSCO SHIPPING and Aluminumof China go up and down completely randomly.
Pair Corralation between COSCO SHIPPING and Aluminumof China
Assuming the 90 days horizon COSCO SHIPPING Holdings is expected to under-perform the Aluminumof China. In addition to that, COSCO SHIPPING is 1.71 times more volatile than Aluminum of. It trades about -0.05 of its total potential returns per unit of risk. Aluminum of is currently generating about 0.24 per unit of volatility. If you would invest 56.00 in Aluminum of on November 3, 2024 and sell it today you would earn a total of 9.00 from holding Aluminum of or generate 16.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COSCO SHIPPING Holdings vs. Aluminum of
Performance |
| Timeline |
| COSCO SHIPPING Holdings |
| Aluminumof China |
COSCO SHIPPING and Aluminumof China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSCO SHIPPING and Aluminumof China
The main advantage of trading using opposite COSCO SHIPPING and Aluminumof China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSCO SHIPPING position performs unexpectedly, Aluminumof China 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 Aluminumof China will offset losses from the drop in Aluminumof China's long position.| COSCO SHIPPING vs. SITC International Holdings | COSCO SHIPPING vs. Orient Overseas Limited | COSCO SHIPPING vs. Pacific Basin Shipping | COSCO SHIPPING vs. SITC International Holdings |
| Aluminumof China vs. Air China Limited | Aluminumof China vs. COSCO SHIPPING Holdings | Aluminumof China vs. Zijin Mining Group | Aluminumof China vs. Bank of China |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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