Correlation Between Western Metal and Shanxi Tond
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By analyzing existing cross correlation between Western Metal Materials and Shanxi Tond Chemical, you can compare the effects of market volatilities on Western Metal and Shanxi Tond 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 Shanxi Tond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Shanxi Tond.
Diversification Opportunities for Western Metal and Shanxi Tond
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Shanxi is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Shanxi Tond Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanxi Tond Chemical 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 Shanxi Tond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanxi Tond Chemical has no effect on the direction of Western Metal i.e., Western Metal and Shanxi Tond go up and down completely randomly.
Pair Corralation between Western Metal and Shanxi Tond
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 1.19 times more return on investment than Shanxi Tond. However, Western Metal is 1.19 times more volatile than Shanxi Tond Chemical. It trades about 0.03 of its potential returns per unit of risk. Shanxi Tond Chemical is currently generating about -0.03 per unit of risk. If you would invest 1,486 in Western Metal Materials on November 6, 2024 and sell it today you would earn a total of 214.00 from holding Western Metal Materials or generate 14.4% 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. Shanxi Tond Chemical
Performance |
| Timeline |
| Western Metal Materials |
| Shanxi Tond Chemical |
Western Metal and Shanxi Tond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Shanxi Tond
The main advantage of trading using opposite Western Metal and Shanxi Tond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Shanxi Tond 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 Shanxi Tond will offset losses from the drop in Shanxi Tond's long position.| Western Metal vs. Xinjiang Baodi Mining | Western Metal vs. Ningbo Jintian Copper | Western Metal vs. Chengtun Mining Group | Western Metal vs. Tibet Huayu Mining |
| Shanxi Tond vs. Tonghua Grape Wine | Shanxi Tond vs. Fujian Newland Computer | Shanxi Tond vs. Easyhome New Retail | Shanxi Tond vs. Eyebright Medical Technology |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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