Correlation Between Western Metal and Shenzhen SDG
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By analyzing existing cross correlation between Western Metal Materials and Shenzhen SDG Information, you can compare the effects of market volatilities on Western Metal and Shenzhen SDG 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 SDG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Shenzhen SDG.
Diversification Opportunities for Western Metal and Shenzhen SDG
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Shenzhen is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Shenzhen SDG Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen SDG Information 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 SDG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen SDG Information has no effect on the direction of Western Metal i.e., Western Metal and Shenzhen SDG go up and down completely randomly.
Pair Corralation between Western Metal and Shenzhen SDG
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 1.45 times more return on investment than Shenzhen SDG. However, Western Metal is 1.45 times more volatile than Shenzhen SDG Information. It trades about 0.05 of its potential returns per unit of risk. Shenzhen SDG Information is currently generating about -0.04 per unit of risk. If you would invest 1,616 in Western Metal Materials on October 30, 2024 and sell it today you would earn a total of 84.00 from holding Western Metal Materials or generate 5.2% 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 SDG Information
Performance |
| Timeline |
| Western Metal Materials |
| Shenzhen SDG Information |
Western Metal and Shenzhen SDG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Shenzhen SDG
The main advantage of trading using opposite Western Metal and Shenzhen SDG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Shenzhen SDG 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 SDG will offset losses from the drop in Shenzhen SDG's long position.| Western Metal vs. Industrial Bank Co | Western Metal vs. Hangzhou Arcvideo Technology | Western Metal vs. Ningbo Tech Bank Co | Western Metal vs. Citic Guoan Wine |
| Shenzhen SDG vs. Bus Online Co | Shenzhen SDG vs. Holitech Technology Co | Shenzhen SDG vs. Gome Telecom Equipment | Shenzhen SDG vs. Cultural Investment Holdings |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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