Correlation Between Natural Health and Aluminumof China
Can any of the company-specific risk be diversified away by investing in both Natural Health 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 Natural Health and Aluminumof China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Health Trends and Aluminum of, you can compare the effects of market volatilities on Natural Health 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 Natural Health with a short position of Aluminumof China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Health and Aluminumof China.
Diversification Opportunities for Natural Health and Aluminumof China
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Natural and Aluminumof is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Natural Health Trends and Aluminum of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminumof China and Natural Health 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 Natural Health Trends 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 Natural Health i.e., Natural Health and Aluminumof China go up and down completely randomly.
Pair Corralation between Natural Health and Aluminumof China
Assuming the 90 days trading horizon Natural Health is expected to generate 11.77 times less return on investment than Aluminumof China. But when comparing it to its historical volatility, Natural Health Trends is 1.47 times less risky than Aluminumof China. It trades about 0.01 of its potential returns per unit of risk. Aluminum of is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 29.00 in Aluminum of on September 12, 2024 and sell it today you would earn a total of 28.00 from holding Aluminum of or generate 96.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Health Trends vs. Aluminum of
Performance |
| Timeline |
| Natural Health Trends |
| Aluminumof China |
Natural Health and Aluminumof China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Health and Aluminumof China
The main advantage of trading using opposite Natural Health and Aluminumof China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Health 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.| Natural Health vs. Lendlease Group | Natural Health vs. FUYO GENERAL LEASE | Natural Health vs. Ares Management Corp | Natural Health vs. INVITATION HOMES DL |
| Aluminumof China vs. Norsk Hydro ASA | Aluminumof China vs. Kaiser Aluminum | Aluminumof China vs. Superior Plus Corp | Aluminumof China vs. SIVERS SEMICONDUCTORS AB |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |