Correlation Between Western Metal and Shenzhen Agricultural
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By analyzing existing cross correlation between Western Metal Materials and Shenzhen Agricultural Products, you can compare the effects of market volatilities on Western Metal and Shenzhen Agricultural 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 Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Shenzhen Agricultural.
Diversification Opportunities for Western Metal and Shenzhen Agricultural
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Shenzhen is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Shenzhen Agricultural Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Agricultural 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 Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Agricultural has no effect on the direction of Western Metal i.e., Western Metal and Shenzhen Agricultural go up and down completely randomly.
Pair Corralation between Western Metal and Shenzhen Agricultural
Assuming the 90 days trading horizon Western Metal is expected to generate 1.23 times less return on investment than Shenzhen Agricultural. In addition to that, Western Metal is 1.47 times more volatile than Shenzhen Agricultural Products. It trades about 0.02 of its total potential returns per unit of risk. Shenzhen Agricultural Products is currently generating about 0.03 per unit of volatility. If you would invest 551.00 in Shenzhen Agricultural Products on October 31, 2024 and sell it today you would earn a total of 107.00 from holding Shenzhen Agricultural Products or generate 19.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Western Metal Materials vs. Shenzhen Agricultural Products
Performance |
Timeline |
Western Metal Materials |
Shenzhen Agricultural |
Western Metal and Shenzhen Agricultural Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Western Metal and Shenzhen Agricultural
The main advantage of trading using opposite Western Metal and Shenzhen Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Shenzhen Agricultural 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 Agricultural will offset losses from the drop in Shenzhen Agricultural's long position.Western Metal vs. Sinosteel Engineering and | ||
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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