Correlation Between Western Metal and TongFu Microelectronics
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By analyzing existing cross correlation between Western Metal Materials and TongFu Microelectronics Co, you can compare the effects of market volatilities on Western Metal and TongFu Microelectronics 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 TongFu Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and TongFu Microelectronics.
Diversification Opportunities for Western Metal and TongFu Microelectronics
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Western and TongFu is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and TongFu Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TongFu Microelectronics 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 TongFu Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TongFu Microelectronics has no effect on the direction of Western Metal i.e., Western Metal and TongFu Microelectronics go up and down completely randomly.
Pair Corralation between Western Metal and TongFu Microelectronics
Assuming the 90 days trading horizon Western Metal is expected to generate 2.3 times less return on investment than TongFu Microelectronics. But when comparing it to its historical volatility, Western Metal Materials is 1.23 times less risky than TongFu Microelectronics. It trades about 0.02 of its potential returns per unit of risk. TongFu Microelectronics Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,289 in TongFu Microelectronics Co on October 29, 2024 and sell it today you would earn a total of 598.00 from holding TongFu Microelectronics Co or generate 26.12% 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. TongFu Microelectronics Co
Performance |
| Timeline |
| Western Metal Materials |
| TongFu Microelectronics |
Western Metal and TongFu Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and TongFu Microelectronics
The main advantage of trading using opposite Western Metal and TongFu Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, TongFu Microelectronics 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 TongFu Microelectronics will offset losses from the drop in TongFu Microelectronics' long position.| Western Metal vs. Zijin Mining Group | Western Metal vs. Wanhua Chemical Group | Western Metal vs. Baoshan Iron Steel | Western Metal vs. Shandong Gold Mining |
| TongFu Microelectronics vs. Ligao Foods CoLtd | TongFu Microelectronics vs. Sichuan Hebang Biotechnology | TongFu Microelectronics vs. Fujian Anjoy Foods | TongFu Microelectronics vs. Guilin Seamild Foods |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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