Correlation Between Western Metal and Changchun
Specify exactly 2 symbols:
By analyzing existing cross correlation between Western Metal Materials and Changchun UP Optotech, you can compare the effects of market volatilities on Western Metal and Changchun 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 Changchun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Changchun.
Diversification Opportunities for Western Metal and Changchun
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and Changchun is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Changchun UP Optotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun UP Optotech 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 Changchun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun UP Optotech has no effect on the direction of Western Metal i.e., Western Metal and Changchun go up and down completely randomly.
Pair Corralation between Western Metal and Changchun
Assuming the 90 days trading horizon Western Metal is expected to generate 3.6 times less return on investment than Changchun. But when comparing it to its historical volatility, Western Metal Materials is 1.39 times less risky than Changchun. It trades about 0.02 of its potential returns per unit of risk. Changchun UP Optotech is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,523 in Changchun UP Optotech on September 2, 2024 and sell it today you would earn a total of 1,632 from holding Changchun UP Optotech or generate 64.68% 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. Changchun UP Optotech
Performance |
| Timeline |
| Western Metal Materials |
| Changchun UP Optotech |
Western Metal and Changchun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Changchun
The main advantage of trading using opposite Western Metal and Changchun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Changchun 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 Changchun will offset losses from the drop in Changchun's 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 |
| Changchun vs. Jiangsu Phoenix Publishing | Changchun vs. Western Metal Materials | Changchun vs. Tibet Huayu Mining | Changchun vs. Time Publishing and |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |