Correlation Between Western Metal and Jiangsu Yanghe
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By analyzing existing cross correlation between Western Metal Materials and Jiangsu Yanghe Brewery, you can compare the effects of market volatilities on Western Metal and Jiangsu Yanghe 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 Jiangsu Yanghe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Jiangsu Yanghe.
Diversification Opportunities for Western Metal and Jiangsu Yanghe
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Jiangsu is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Jiangsu Yanghe Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Yanghe Brewery 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 Jiangsu Yanghe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Yanghe Brewery has no effect on the direction of Western Metal i.e., Western Metal and Jiangsu Yanghe go up and down completely randomly.
Pair Corralation between Western Metal and Jiangsu Yanghe
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 1.49 times more return on investment than Jiangsu Yanghe. However, Western Metal is 1.49 times more volatile than Jiangsu Yanghe Brewery. It trades about 0.02 of its potential returns per unit of risk. Jiangsu Yanghe Brewery is currently generating about -0.08 per unit of risk. If you would invest 1,674 in Western Metal Materials on October 25, 2024 and sell it today you would earn a total of 59.00 from holding Western Metal Materials or generate 3.52% 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. Jiangsu Yanghe Brewery
Performance |
| Timeline |
| Western Metal Materials |
| Jiangsu Yanghe Brewery |
Western Metal and Jiangsu Yanghe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Jiangsu Yanghe
The main advantage of trading using opposite Western Metal and Jiangsu Yanghe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Jiangsu Yanghe 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 Jiangsu Yanghe will offset losses from the drop in Jiangsu Yanghe's long position.| Western Metal vs. Zijin Mining Group | Western Metal vs. Wanhua Chemical Group | Western Metal vs. Baoshan Iron Steel | Western Metal vs. Rongsheng Petrochemical Co |
| Jiangsu Yanghe vs. Agricultural Bank of | Jiangsu Yanghe vs. Postal Savings Bank | Jiangsu Yanghe vs. Bank of Communications | Jiangsu Yanghe vs. China Merchants Bank |
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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