Correlation Between Guocheng Mining and Western Mining
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By analyzing existing cross correlation between Guocheng Mining Co and Western Mining Co, you can compare the effects of market volatilities on Guocheng Mining 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 Guocheng Mining with a short position of Western Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guocheng Mining and Western Mining.
Diversification Opportunities for Guocheng Mining and Western Mining
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guocheng and Western is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Guocheng Mining 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 Guocheng Mining 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 Guocheng Mining 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 Guocheng Mining i.e., Guocheng Mining and Western Mining go up and down completely randomly.
Pair Corralation between Guocheng Mining and Western Mining
Assuming the 90 days trading horizon Guocheng Mining Co is expected to generate 1.29 times more return on investment than Western Mining. However, Guocheng Mining is 1.29 times more volatile than Western Mining Co. It trades about 0.05 of its potential returns per unit of risk. Western Mining Co is currently generating about -0.02 per unit of risk. If you would invest 1,244 in Guocheng Mining Co on September 1, 2024 and sell it today you would earn a total of 167.00 from holding Guocheng Mining Co or generate 13.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guocheng Mining Co vs. Western Mining Co
Performance |
| Timeline |
| Guocheng Mining |
| Western Mining |
Guocheng Mining and Western Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guocheng Mining and Western Mining
The main advantage of trading using opposite Guocheng Mining and Western Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guocheng Mining 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.| Guocheng Mining vs. Kweichow Moutai Co | Guocheng Mining vs. Contemporary Amperex Technology | Guocheng Mining vs. G bits Network Technology | Guocheng Mining vs. BYD Co Ltd |
| Western Mining vs. Zijin Mining Group | Western Mining vs. Wanhua Chemical Group | Western Mining vs. Baoshan Iron Steel | Western Mining 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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