Correlation Between Western Metal and Jinlong Machinery
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By analyzing existing cross correlation between Western Metal Materials and Jinlong Machinery Electronic, you can compare the effects of market volatilities on Western Metal and Jinlong Machinery 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 Jinlong Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Jinlong Machinery.
Diversification Opportunities for Western Metal and Jinlong Machinery
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Western and Jinlong is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Jinlong Machinery Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinlong Machinery 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 Jinlong Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinlong Machinery has no effect on the direction of Western Metal i.e., Western Metal and Jinlong Machinery go up and down completely randomly.
Pair Corralation between Western Metal and Jinlong Machinery
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 1.05 times more return on investment than Jinlong Machinery. However, Western Metal is 1.05 times more volatile than Jinlong Machinery Electronic. It trades about 0.15 of its potential returns per unit of risk. Jinlong Machinery Electronic is currently generating about -0.19 per unit of risk. If you would invest 1,647 in Western Metal Materials on October 18, 2024 and sell it today you would earn a total of 181.00 from holding Western Metal Materials or generate 10.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Metal Materials vs. Jinlong Machinery Electronic
Performance |
| Timeline |
| Western Metal Materials |
| Jinlong Machinery |
Western Metal and Jinlong Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Jinlong Machinery
The main advantage of trading using opposite Western Metal and Jinlong Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Jinlong Machinery 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 Jinlong Machinery will offset losses from the drop in Jinlong Machinery's long position.| Western Metal vs. Time Publishing and | Western Metal vs. Qingdao Foods Co | Western Metal vs. COL Digital Publishing | Western Metal vs. Juewei Food Co |
| Jinlong Machinery vs. Western Metal Materials | Jinlong Machinery vs. Caihong Display Devices | Jinlong Machinery vs. Bank of Suzhou | Jinlong Machinery vs. Ningbo Tip Rubber |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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