Correlation Between Commercial Vehicle and Aluminumof China
Can any of the company-specific risk be diversified away by investing in both Commercial Vehicle 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 Commercial Vehicle and Aluminumof China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commercial Vehicle Group and Aluminum of, you can compare the effects of market volatilities on Commercial Vehicle 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 Commercial Vehicle with a short position of Aluminumof China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial Vehicle and Aluminumof China.
Diversification Opportunities for Commercial Vehicle and Aluminumof China
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Commercial and Aluminumof is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Vehicle Group and Aluminum of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminumof China and Commercial Vehicle 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 Commercial Vehicle Group 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 Commercial Vehicle i.e., Commercial Vehicle and Aluminumof China go up and down completely randomly.
Pair Corralation between Commercial Vehicle and Aluminumof China
Assuming the 90 days trading horizon Commercial Vehicle Group is expected to under-perform the Aluminumof China. In addition to that, Commercial Vehicle is 1.08 times more volatile than Aluminum of. It trades about -0.23 of its total potential returns per unit of risk. Aluminum of is currently generating about 0.19 per unit of volatility. If you would invest 55.00 in Aluminum of on November 7, 2024 and sell it today you would earn a total of 6.00 from holding Aluminum of or generate 10.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Commercial Vehicle Group vs. Aluminum of
Performance |
| Timeline |
| Commercial Vehicle |
| Aluminumof China |
Commercial Vehicle and Aluminumof China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial Vehicle and Aluminumof China
The main advantage of trading using opposite Commercial Vehicle and Aluminumof China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial Vehicle 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.| Commercial Vehicle vs. SLR Investment Corp | Commercial Vehicle vs. FORTRESS BIOTECHPRFA 25 | Commercial Vehicle vs. New Residential Investment | Commercial Vehicle vs. Bio Techne Corp |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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