Correlation Between Yuan Longping and Western Metal
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By analyzing existing cross correlation between Yuan Longping High tech and Western Metal Materials, you can compare the effects of market volatilities on Yuan Longping 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 Yuan Longping with a short position of Western Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuan Longping and Western Metal.
Diversification Opportunities for Yuan Longping and Western Metal
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Yuan and Western is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Yuan Longping High tech 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 Yuan Longping 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 Yuan Longping High tech 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 Yuan Longping i.e., Yuan Longping and Western Metal go up and down completely randomly.
Pair Corralation between Yuan Longping and Western Metal
Assuming the 90 days trading horizon Yuan Longping High tech is expected to generate 0.74 times more return on investment than Western Metal. However, Yuan Longping High tech is 1.35 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 1,090 in Yuan Longping High tech on September 4, 2024 and sell it today you would earn a total of 39.00 from holding Yuan Longping High tech or generate 3.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuan Longping High tech vs. Western Metal Materials
Performance |
| Timeline |
| Yuan Longping High |
| Western Metal Materials |
Yuan Longping and Western Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuan Longping and Western Metal
The main advantage of trading using opposite Yuan Longping and Western Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuan Longping 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.| Yuan Longping vs. Agricultural Bank of | Yuan Longping vs. Industrial and Commercial | Yuan Longping vs. Bank of China | Yuan Longping vs. China Construction Bank |
| Western Metal vs. Techshine Electronics Co | Western Metal vs. Leaguer Shenzhen MicroElectronics | Western Metal vs. Suzhou Weizhixiang Food | Western Metal vs. Guilin Seamild Foods |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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