Correlation Between Western Metal and Cangzhou Mingzhu
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By analyzing existing cross correlation between Western Metal Materials and Cangzhou Mingzhu Plastic, you can compare the effects of market volatilities on Western Metal and Cangzhou Mingzhu 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 Cangzhou Mingzhu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Cangzhou Mingzhu.
Diversification Opportunities for Western Metal and Cangzhou Mingzhu
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Western and Cangzhou is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Cangzhou Mingzhu Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cangzhou Mingzhu Plastic 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 Cangzhou Mingzhu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cangzhou Mingzhu Plastic has no effect on the direction of Western Metal i.e., Western Metal and Cangzhou Mingzhu go up and down completely randomly.
Pair Corralation between Western Metal and Cangzhou Mingzhu
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 1.66 times more return on investment than Cangzhou Mingzhu. However, Western Metal is 1.66 times more volatile than Cangzhou Mingzhu Plastic. It trades about 0.02 of its potential returns per unit of risk. Cangzhou Mingzhu Plastic is currently generating about 0.03 per unit of risk. If you would invest 1,898 in Western Metal Materials on January 28, 2025 and sell it today you would earn a total of 11.00 from holding Western Metal Materials or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Metal Materials vs. Cangzhou Mingzhu Plastic
Performance |
| Timeline |
| Western Metal Materials |
| Cangzhou Mingzhu Plastic |
Western Metal and Cangzhou Mingzhu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Cangzhou Mingzhu
The main advantage of trading using opposite Western Metal and Cangzhou Mingzhu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Cangzhou Mingzhu 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 Cangzhou Mingzhu will offset losses from the drop in Cangzhou Mingzhu's long position.| Western Metal vs. Wuhan Yangtze Communication | Western Metal vs. Shanghai Xinhua Media | Western Metal vs. Do Fluoride Chemicals Co | Western Metal vs. Ciwen Media Co |
| Cangzhou Mingzhu vs. CIMC Vehicles Co | Cangzhou Mingzhu vs. Tongxing Environmental Protection | Cangzhou Mingzhu vs. Zotye Automobile Co | Cangzhou Mingzhu vs. Ningbo Fangzheng Automobile |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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