Correlation Between Sino Platinum and Jiaozuo Wanfang
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By analyzing existing cross correlation between Sino Platinum Metals Co and Jiaozuo Wanfang Aluminum, you can compare the effects of market volatilities on Sino Platinum and Jiaozuo Wanfang 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 Sino Platinum with a short position of Jiaozuo Wanfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino Platinum and Jiaozuo Wanfang.
Diversification Opportunities for Sino Platinum and Jiaozuo Wanfang
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sino and Jiaozuo is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Sino Platinum Metals Co and Jiaozuo Wanfang Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiaozuo Wanfang Aluminum and Sino Platinum 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 Sino Platinum Metals Co are associated (or correlated) with Jiaozuo Wanfang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiaozuo Wanfang Aluminum has no effect on the direction of Sino Platinum i.e., Sino Platinum and Jiaozuo Wanfang go up and down completely randomly.
Pair Corralation between Sino Platinum and Jiaozuo Wanfang
Assuming the 90 days trading horizon Sino Platinum is expected to generate 1.8 times less return on investment than Jiaozuo Wanfang. But when comparing it to its historical volatility, Sino Platinum Metals Co is 1.55 times less risky than Jiaozuo Wanfang. It trades about 0.13 of its potential returns per unit of risk. Jiaozuo Wanfang Aluminum is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 517.00 in Jiaozuo Wanfang Aluminum on September 5, 2024 and sell it today you would earn a total of 164.00 from holding Jiaozuo Wanfang Aluminum or generate 31.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Sino Platinum Metals Co vs. Jiaozuo Wanfang Aluminum
Performance |
Timeline |
Sino Platinum Metals |
Jiaozuo Wanfang Aluminum |
Sino Platinum and Jiaozuo Wanfang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sino Platinum and Jiaozuo Wanfang
The main advantage of trading using opposite Sino Platinum and Jiaozuo Wanfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sino Platinum position performs unexpectedly, Jiaozuo Wanfang 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 Jiaozuo Wanfang will offset losses from the drop in Jiaozuo Wanfang's long position.Sino Platinum vs. Zijin Mining Group | Sino Platinum vs. Wanhua Chemical Group | Sino Platinum vs. Baoshan Iron Steel | Sino Platinum vs. Rongsheng Petrochemical Co |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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