Correlation Between Western Metal and Shenzhen Kexin
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By analyzing existing cross correlation between Western Metal Materials and Shenzhen Kexin Communication, you can compare the effects of market volatilities on Western Metal and Shenzhen Kexin 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 Kexin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Shenzhen Kexin.
Diversification Opportunities for Western Metal and Shenzhen Kexin
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and Shenzhen is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Shenzhen Kexin Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Kexin Commu 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 Kexin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Kexin Commu has no effect on the direction of Western Metal i.e., Western Metal and Shenzhen Kexin go up and down completely randomly.
Pair Corralation between Western Metal and Shenzhen Kexin
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 1.01 times more return on investment than Shenzhen Kexin. However, Western Metal is 1.01 times more volatile than Shenzhen Kexin Communication. It trades about -0.05 of its potential returns per unit of risk. Shenzhen Kexin Communication is currently generating about -0.22 per unit of risk. If you would invest 1,687 in Western Metal Materials on September 1, 2024 and sell it today you would lose (71.00) from holding Western Metal Materials or give up 4.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Metal Materials vs. Shenzhen Kexin Communication
Performance |
| Timeline |
| Western Metal Materials |
| Shenzhen Kexin Commu |
Western Metal and Shenzhen Kexin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Shenzhen Kexin
The main advantage of trading using opposite Western Metal and Shenzhen Kexin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Shenzhen Kexin 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 Kexin will offset losses from the drop in Shenzhen Kexin'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 |
| Shenzhen Kexin vs. Industrial and Commercial | Shenzhen Kexin vs. Kweichow Moutai Co | Shenzhen Kexin vs. Agricultural Bank of | Shenzhen Kexin vs. China Mobile Limited |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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