Correlation Between Yuexiu Transport and Kaiser Aluminum
Can any of the company-specific risk be diversified away by investing in both Yuexiu Transport and Kaiser Aluminum 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 Yuexiu Transport and Kaiser Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuexiu Transport Infrastructure and Kaiser Aluminum, you can compare the effects of market volatilities on Yuexiu Transport and Kaiser Aluminum 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 Yuexiu Transport with a short position of Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuexiu Transport and Kaiser Aluminum.
Diversification Opportunities for Yuexiu Transport and Kaiser Aluminum
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Yuexiu and Kaiser is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum and Yuexiu Transport 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 Yuexiu Transport Infrastructure are associated (or correlated) with Kaiser Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaiser Aluminum has no effect on the direction of Yuexiu Transport i.e., Yuexiu Transport and Kaiser Aluminum go up and down completely randomly.
Pair Corralation between Yuexiu Transport and Kaiser Aluminum
Assuming the 90 days horizon Yuexiu Transport Infrastructure is expected to generate 1.33 times more return on investment than Kaiser Aluminum. However, Yuexiu Transport is 1.33 times more volatile than Kaiser Aluminum. It trades about 0.07 of its potential returns per unit of risk. Kaiser Aluminum is currently generating about -0.04 per unit of risk. If you would invest 35.00 in Yuexiu Transport Infrastructure on September 22, 2024 and sell it today you would earn a total of 10.00 from holding Yuexiu Transport Infrastructure or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuexiu Transport Infrastructur vs. Kaiser Aluminum
Performance |
| Timeline |
| Yuexiu Transport Inf |
| Kaiser Aluminum |
Yuexiu Transport and Kaiser Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuexiu Transport and Kaiser Aluminum
The main advantage of trading using opposite Yuexiu Transport and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuexiu Transport position performs unexpectedly, Kaiser Aluminum 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 Kaiser Aluminum will offset losses from the drop in Kaiser Aluminum's long position.| Yuexiu Transport vs. Transurban Group | Yuexiu Transport vs. Getlink SE | Yuexiu Transport vs. Jiangsu Expressway | Yuexiu Transport vs. Zhejiang Expressway Co |
| Kaiser Aluminum vs. Norsk Hydro ASA | Kaiser Aluminum vs. Norsk Hydro ASA | Kaiser Aluminum vs. Aluminum of | Kaiser Aluminum vs. Alcoa Corp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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