Correlation Between Western Metal and CITIC Guoan
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By analyzing existing cross correlation between Western Metal Materials and CITIC Guoan Information, you can compare the effects of market volatilities on Western Metal and CITIC Guoan 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 CITIC Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and CITIC Guoan.
Diversification Opportunities for Western Metal and CITIC Guoan
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and CITIC is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and CITIC Guoan Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Guoan 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 CITIC Guoan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Guoan Information has no effect on the direction of Western Metal i.e., Western Metal and CITIC Guoan go up and down completely randomly.
Pair Corralation between Western Metal and CITIC Guoan
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 1.42 times more return on investment than CITIC Guoan. However, Western Metal is 1.42 times more volatile than CITIC Guoan Information. It trades about 0.08 of its potential returns per unit of risk. CITIC Guoan Information is currently generating about -0.21 per unit of risk. If you would invest 1,751 in Western Metal Materials on October 23, 2024 and sell it today you would earn a total of 78.00 from holding Western Metal Materials or generate 4.45% 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. CITIC Guoan Information
Performance |
| Timeline |
| Western Metal Materials |
| CITIC Guoan Information |
Western Metal and CITIC Guoan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and CITIC Guoan
The main advantage of trading using opposite Western Metal and CITIC Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, CITIC Guoan 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 CITIC Guoan will offset losses from the drop in CITIC Guoan's long position.| Western Metal vs. Dazhong Transportation Group | Western Metal vs. Hubei Xingfa Chemicals | Western Metal vs. Longjian Road Bridge | Western Metal vs. Porton Fine Chemicals |
| CITIC Guoan vs. Semiconductor Manufacturing Intl | CITIC Guoan vs. Qumei Furniture Group | CITIC Guoan vs. Hunan Mendale Hometextile | CITIC Guoan vs. Will Semiconductor Co |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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