Correlation Between Western Metal and Shenzhen Silver
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By analyzing existing cross correlation between Western Metal Materials and Shenzhen Silver Basis, you can compare the effects of market volatilities on Western Metal and Shenzhen Silver 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 Shenzhen Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Shenzhen Silver.
Diversification Opportunities for Western Metal and Shenzhen Silver
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Shenzhen is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Shenzhen Silver Basis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Silver Basis 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 Shenzhen Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Silver Basis has no effect on the direction of Western Metal i.e., Western Metal and Shenzhen Silver go up and down completely randomly.
Pair Corralation between Western Metal and Shenzhen Silver
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 1.24 times more return on investment than Shenzhen Silver. However, Western Metal is 1.24 times more volatile than Shenzhen Silver Basis. It trades about 0.03 of its potential returns per unit of risk. Shenzhen Silver Basis is currently generating about -0.05 per unit of risk. If you would invest 1,687 in Western Metal Materials on November 3, 2024 and sell it today you would earn a total of 13.00 from holding Western Metal Materials or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Metal Materials vs. Shenzhen Silver Basis
Performance |
| Timeline |
| Western Metal Materials |
| Shenzhen Silver Basis |
Western Metal and Shenzhen Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Shenzhen Silver
The main advantage of trading using opposite Western Metal and Shenzhen Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Shenzhen Silver 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 Shenzhen Silver will offset losses from the drop in Shenzhen Silver's long position.| Western Metal vs. Kingclean Electric Co | Western Metal vs. Hangzhou Zhongya Machinery | Western Metal vs. Guangzhou KDT Machinery | Western Metal vs. Masterwork Machinery |
| Shenzhen Silver vs. Chinese Universe Publishing | Shenzhen Silver vs. Jiangsu Phoenix Publishing | Shenzhen Silver vs. Shanghai Action Education | Shenzhen Silver vs. Xinhua Winshare Publishing |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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