Correlation Between Western Metal and Elite Color
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By analyzing existing cross correlation between Western Metal Materials and Elite Color Environmental, you can compare the effects of market volatilities on Western Metal and Elite Color 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 Elite Color. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Elite Color.
Diversification Opportunities for Western Metal and Elite Color
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and Elite is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Elite Color Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elite Color Environmental 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 Elite Color. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elite Color Environmental has no effect on the direction of Western Metal i.e., Western Metal and Elite Color go up and down completely randomly.
Pair Corralation between Western Metal and Elite Color
Assuming the 90 days trading horizon Western Metal is expected to generate 11.9 times less return on investment than Elite Color. But when comparing it to its historical volatility, Western Metal Materials is 1.06 times less risky than Elite Color. It trades about 0.02 of its potential returns per unit of risk. Elite Color Environmental is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 604.00 in Elite Color Environmental on September 2, 2024 and sell it today you would earn a total of 71.00 from holding Elite Color Environmental or generate 11.75% 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. Elite Color Environmental
Performance |
| Timeline |
| Western Metal Materials |
| Elite Color Environmental |
Western Metal and Elite Color Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Elite Color
The main advantage of trading using opposite Western Metal and Elite Color positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Elite Color 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 Elite Color will offset losses from the drop in Elite Color'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 |
| Elite Color vs. TVZone Media Co | Elite Color vs. Lander Sports Development | Elite Color vs. Shenzhen Bioeasy Biotechnology | Elite Color vs. Wuhan Hvsen Biotechnology |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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