Correlation Between Chengdu Xingrong and Western Metal
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By analyzing existing cross correlation between Chengdu Xingrong Investment and Western Metal Materials, you can compare the effects of market volatilities on Chengdu Xingrong 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 Chengdu Xingrong with a short position of Western Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Xingrong and Western Metal.
Diversification Opportunities for Chengdu Xingrong and Western Metal
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chengdu and Western is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Xingrong Investment 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 Chengdu Xingrong 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 Chengdu Xingrong Investment 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 Chengdu Xingrong i.e., Chengdu Xingrong and Western Metal go up and down completely randomly.
Pair Corralation between Chengdu Xingrong and Western Metal
Assuming the 90 days trading horizon Chengdu Xingrong is expected to generate 183.58 times less return on investment than Western Metal. But when comparing it to its historical volatility, Chengdu Xingrong Investment is 1.22 times less risky than Western Metal. It trades about 0.0 of its potential returns per unit of risk. Western Metal Materials is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,396 in Western Metal Materials on September 27, 2024 and sell it today you would earn a total of 338.00 from holding Western Metal Materials or generate 24.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu Xingrong Investment vs. Western Metal Materials
Performance |
| Timeline |
| Chengdu Xingrong Inv |
| Western Metal Materials |
Chengdu Xingrong and Western Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu Xingrong and Western Metal
The main advantage of trading using opposite Chengdu Xingrong and Western Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Xingrong 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.| Chengdu Xingrong vs. Ningbo Construction Co | Chengdu Xingrong vs. Shaanxi Construction Machinery | Chengdu Xingrong vs. Weichai Heavy Machinery | Chengdu Xingrong vs. Gifore Agricultural Machinery |
| Western Metal vs. Zijin Mining Group | Western Metal vs. Wanhua Chemical Group | Western Metal vs. Baoshan Iron Steel | Western Metal vs. Shandong Gold Mining |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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