Correlation Between Lonkey Industrial and Western Metal
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By analyzing existing cross correlation between Lonkey Industrial Co and Western Metal Materials, you can compare the effects of market volatilities on Lonkey Industrial and Western Metal 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 Lonkey Industrial with a short position of Western Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lonkey Industrial and Western Metal.
Diversification Opportunities for Lonkey Industrial and Western Metal
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lonkey and Western is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Lonkey Industrial Co and Western Metal Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Metal Materials and Lonkey Industrial 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 Lonkey Industrial Co are associated (or correlated) with Western Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Metal Materials has no effect on the direction of Lonkey Industrial i.e., Lonkey Industrial and Western Metal go up and down completely randomly.
Pair Corralation between Lonkey Industrial and Western Metal
Assuming the 90 days trading horizon Lonkey Industrial Co is expected to generate 0.67 times more return on investment than Western Metal. However, Lonkey Industrial Co is 1.48 times less risky than Western Metal. It trades about 0.08 of its potential returns per unit of risk. Western Metal Materials is currently generating about 0.03 per unit of risk. If you would invest 320.00 in Lonkey Industrial Co on September 3, 2024 and sell it today you would earn a total of 10.00 from holding Lonkey Industrial Co or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lonkey Industrial Co vs. Western Metal Materials
Performance |
| Timeline |
| Lonkey Industrial |
| Western Metal Materials |
Lonkey Industrial and Western Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lonkey Industrial and Western Metal
The main advantage of trading using opposite Lonkey Industrial and Western Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lonkey Industrial position performs unexpectedly, Western Metal 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 Western Metal will offset losses from the drop in Western Metal's long position.| Lonkey Industrial vs. Chengdu Spaceon Electronics | Lonkey Industrial vs. Sinosteel Luonai Materials | Lonkey Industrial vs. JCHX Mining Management | Lonkey Industrial vs. King Strong New Material |
| Western Metal vs. Haima Automobile Group | Western Metal vs. FSPG Hi Tech Co | Western Metal vs. Tianjin Hi Tech Development | Western Metal vs. Peoples Insurance of |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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