Correlation Between Lonkey Industrial and Western Mining
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By analyzing existing cross correlation between Lonkey Industrial Co and Western Mining Co, you can compare the effects of market volatilities on Lonkey Industrial and Western Mining 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 Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lonkey Industrial and Western Mining.
Diversification Opportunities for Lonkey Industrial and Western Mining
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lonkey and Western is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Lonkey Industrial Co and Western Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Mining 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 Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Mining has no effect on the direction of Lonkey Industrial i.e., Lonkey Industrial and Western Mining go up and down completely randomly.
Pair Corralation between Lonkey Industrial and Western Mining
Assuming the 90 days trading horizon Lonkey Industrial is expected to generate 20.23 times less return on investment than Western Mining. But when comparing it to its historical volatility, Lonkey Industrial Co is 1.07 times less risky than Western Mining. It trades about 0.0 of its potential returns per unit of risk. Western Mining Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,263 in Western Mining Co on September 3, 2024 and sell it today you would earn a total of 421.00 from holding Western Mining Co or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lonkey Industrial Co vs. Western Mining Co
Performance |
| Timeline |
| Lonkey Industrial |
| Western Mining |
Lonkey Industrial and Western Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lonkey Industrial and Western Mining
The main advantage of trading using opposite Lonkey Industrial and Western Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lonkey Industrial position performs unexpectedly, Western Mining 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 Mining will offset losses from the drop in Western Mining'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 Mining vs. Zijin Mining Group | Western Mining vs. Baoshan Iron Steel | Western Mining vs. Rongsheng Petrochemical Co | Western Mining vs. Hoshine Silicon Ind |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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