Correlation Between Western Metal and Shenzhen Centralcon
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By analyzing existing cross correlation between Western Metal Materials and Shenzhen Centralcon Investment, you can compare the effects of market volatilities on Western Metal and Shenzhen Centralcon 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 Western Metal with a short position of Shenzhen Centralcon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Shenzhen Centralcon.
Diversification Opportunities for Western Metal and Shenzhen Centralcon
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Shenzhen is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Shenzhen Centralcon Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Centralcon and Western Metal 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 Western Metal Materials are associated (or correlated) with Shenzhen Centralcon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Centralcon has no effect on the direction of Western Metal i.e., Western Metal and Shenzhen Centralcon go up and down completely randomly.
Pair Corralation between Western Metal and Shenzhen Centralcon
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 0.74 times more return on investment than Shenzhen Centralcon. However, Western Metal Materials is 1.35 times less risky than Shenzhen Centralcon. It trades about 0.17 of its potential returns per unit of risk. Shenzhen Centralcon Investment is currently generating about -0.09 per unit of risk. If you would invest 1,587 in Western Metal Materials on September 27, 2024 and sell it today you would earn a total of 147.00 from holding Western Metal Materials or generate 9.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Metal Materials vs. Shenzhen Centralcon Investment
Performance |
| Timeline |
| Western Metal Materials |
| Shenzhen Centralcon |
Western Metal and Shenzhen Centralcon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Shenzhen Centralcon
The main advantage of trading using opposite Western Metal and Shenzhen Centralcon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Shenzhen Centralcon 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 Shenzhen Centralcon will offset losses from the drop in Shenzhen Centralcon's long position.| Western Metal vs. Zijin Mining Group | Western Metal vs. Wanhua Chemical Group | Western Metal vs. Baoshan Iron Steel | Western Metal vs. Shandong Gold Mining |
| Shenzhen Centralcon vs. PetroChina Co Ltd | Shenzhen Centralcon vs. China Mobile Limited | Shenzhen Centralcon vs. CNOOC Limited | Shenzhen Centralcon vs. Ping An Insurance |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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