Correlation Between Western Metal and Asia Potash
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By analyzing existing cross correlation between Western Metal Materials and Asia Potash International, you can compare the effects of market volatilities on Western Metal and Asia Potash 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 Asia Potash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Asia Potash.
Diversification Opportunities for Western Metal and Asia Potash
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and Asia is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Asia Potash International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Potash International 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 Asia Potash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Potash International has no effect on the direction of Western Metal i.e., Western Metal and Asia Potash go up and down completely randomly.
Pair Corralation between Western Metal and Asia Potash
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 1.0 times more return on investment than Asia Potash. However, Western Metal Materials is 1.0 times less risky than Asia Potash. It trades about 0.03 of its potential returns per unit of risk. Asia Potash International is currently generating about -0.02 per unit of risk. If you would invest 1,456 in Western Metal Materials on September 4, 2024 and sell it today you would earn a total of 162.00 from holding Western Metal Materials or generate 11.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Metal Materials vs. Asia Potash International
Performance |
| Timeline |
| Western Metal Materials |
| Asia Potash International |
Western Metal and Asia Potash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Asia Potash
The main advantage of trading using opposite Western Metal and Asia Potash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Asia Potash 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 Asia Potash will offset losses from the drop in Asia Potash's long position.| Western Metal vs. Techshine Electronics Co | Western Metal vs. Leaguer Shenzhen MicroElectronics | Western Metal vs. Suzhou Weizhixiang Food | Western Metal vs. Guilin Seamild Foods |
| Asia Potash vs. Qingdao Citymedia Co | Asia Potash vs. Gem Year Industrial Co | Asia Potash vs. Inly Media Co | Asia Potash vs. JiShi Media 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 Stocks Directory module to find actively traded stocks across global markets.
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