Correlation Between Western Metal and New Hope
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By analyzing existing cross correlation between Western Metal Materials and New Hope Dairy, you can compare the effects of market volatilities on Western Metal and New Hope 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 New Hope. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and New Hope.
Diversification Opportunities for Western Metal and New Hope
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and New is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and New Hope Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Hope Dairy 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 New Hope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Hope Dairy has no effect on the direction of Western Metal i.e., Western Metal and New Hope go up and down completely randomly.
Pair Corralation between Western Metal and New Hope
Assuming the 90 days trading horizon Western Metal is expected to generate 1.78 times less return on investment than New Hope. In addition to that, Western Metal is 1.01 times more volatile than New Hope Dairy. It trades about 0.05 of its total potential returns per unit of risk. New Hope Dairy is currently generating about 0.1 per unit of volatility. If you would invest 1,301 in New Hope Dairy on October 30, 2024 and sell it today you would earn a total of 146.00 from holding New Hope Dairy or generate 11.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Metal Materials vs. New Hope Dairy
Performance |
| Timeline |
| Western Metal Materials |
| New Hope Dairy |
Western Metal and New Hope Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and New Hope
The main advantage of trading using opposite Western Metal and New Hope positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, New Hope 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 New Hope will offset losses from the drop in New Hope's long position.| Western Metal vs. Industrial Bank Co | Western Metal vs. Hangzhou Arcvideo Technology | Western Metal vs. Ningbo Tech Bank Co | Western Metal vs. Citic Guoan Wine |
| New Hope vs. Lier Chemical Co | New Hope vs. Maoming Petro Chemical Shihua | New Hope vs. Hengli Petrochemical Co | New Hope vs. Liuzhou Chemical Industry |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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