Correlation Between Western Metal and Guangdong Shenglu
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By analyzing existing cross correlation between Western Metal Materials and Guangdong Shenglu Telecommunication, you can compare the effects of market volatilities on Western Metal and Guangdong Shenglu 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 Guangdong Shenglu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Guangdong Shenglu.
Diversification Opportunities for Western Metal and Guangdong Shenglu
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Western and Guangdong is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Guangdong Shenglu Telecommunic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Shenglu 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 Guangdong Shenglu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Shenglu has no effect on the direction of Western Metal i.e., Western Metal and Guangdong Shenglu go up and down completely randomly.
Pair Corralation between Western Metal and Guangdong Shenglu
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 0.88 times more return on investment than Guangdong Shenglu. However, Western Metal Materials is 1.14 times less risky than Guangdong Shenglu. It trades about 0.02 of its potential returns per unit of risk. Guangdong Shenglu Telecommunication is currently generating about -0.03 per unit of risk. If you would invest 1,645 in Western Metal Materials on October 14, 2024 and sell it today you would earn a total of 202.00 from holding Western Metal Materials or generate 12.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Metal Materials vs. Guangdong Shenglu Telecommunic
Performance |
| Timeline |
| Western Metal Materials |
| Guangdong Shenglu |
Western Metal and Guangdong Shenglu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Guangdong Shenglu
The main advantage of trading using opposite Western Metal and Guangdong Shenglu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Guangdong Shenglu 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 Guangdong Shenglu will offset losses from the drop in Guangdong Shenglu's long position.| Western Metal vs. Jiangsu Phoenix Publishing | Western Metal vs. Northern United Publishing | Western Metal vs. Offcn Education Technology | Western Metal vs. Chinese Universe Publishing |
| Guangdong Shenglu vs. Wuhan Hvsen Biotechnology | Guangdong Shenglu vs. Jiaozuo Wanfang Aluminum | Guangdong Shenglu vs. Shandong Sanyuan Biotechnology | Guangdong Shenglu vs. Western Metal Materials |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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