Correlation Between Hengli Industrial and Western Metal
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By analyzing existing cross correlation between Hengli Industrial Development and Western Metal Materials, you can compare the effects of market volatilities on Hengli 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 Hengli Industrial with a short position of Western Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengli Industrial and Western Metal.
Diversification Opportunities for Hengli Industrial and Western Metal
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hengli and Western is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hengli Industrial Development 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 Hengli 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 Hengli Industrial Development 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 Hengli Industrial i.e., Hengli Industrial and Western Metal go up and down completely randomly.
Pair Corralation between Hengli Industrial and Western Metal
Assuming the 90 days trading horizon Hengli Industrial Development is expected to under-perform the Western Metal. In addition to that, Hengli Industrial is 1.35 times more volatile than Western Metal Materials. It trades about -0.03 of its total potential returns per unit of risk. Western Metal Materials is currently generating about 0.05 per unit of volatility. If you would invest 1,424 in Western Metal Materials on October 12, 2024 and sell it today you would earn a total of 291.00 from holding Western Metal Materials or generate 20.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengli Industrial Development vs. Western Metal Materials
Performance |
| Timeline |
| Hengli Industrial |
| Western Metal Materials |
Hengli Industrial and Western Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengli Industrial and Western Metal
The main advantage of trading using opposite Hengli Industrial and Western Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengli 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.| Hengli Industrial vs. Tsingtao Brewery Co | Hengli Industrial vs. Dawning Information Industry | Hengli Industrial vs. Wuhan Yangtze Communication | Hengli Industrial vs. Unisplendour Corp |
| Western Metal vs. Anhui Deli Household | Western Metal vs. Zhangjiagang Freetrade Science | Western Metal vs. Chahua Modern Housewares | Western Metal vs. Tibet Huayu 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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