Correlation Between Western Metal and Ningbo Jianan
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By analyzing existing cross correlation between Western Metal Materials and Ningbo Jianan Electronics, you can compare the effects of market volatilities on Western Metal and Ningbo Jianan 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 Ningbo Jianan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Ningbo Jianan.
Diversification Opportunities for Western Metal and Ningbo Jianan
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and Ningbo is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Ningbo Jianan Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Jianan Electronics 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 Ningbo Jianan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Jianan Electronics has no effect on the direction of Western Metal i.e., Western Metal and Ningbo Jianan go up and down completely randomly.
Pair Corralation between Western Metal and Ningbo Jianan
Assuming the 90 days trading horizon Western Metal is expected to generate 2.48 times less return on investment than Ningbo Jianan. In addition to that, Western Metal is 1.0 times more volatile than Ningbo Jianan Electronics. It trades about 0.07 of its total potential returns per unit of risk. Ningbo Jianan Electronics is currently generating about 0.17 per unit of volatility. If you would invest 2,190 in Ningbo Jianan Electronics on August 30, 2024 and sell it today you would earn a total of 283.00 from holding Ningbo Jianan Electronics or generate 12.92% 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. Ningbo Jianan Electronics
Performance |
| Timeline |
| Western Metal Materials |
| Ningbo Jianan Electronics |
Western Metal and Ningbo Jianan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Ningbo Jianan
The main advantage of trading using opposite Western Metal and Ningbo Jianan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Ningbo Jianan 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 Ningbo Jianan will offset losses from the drop in Ningbo Jianan'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 |
| Ningbo Jianan vs. GigaDevice SemiconductorBeiji | Ningbo Jianan vs. Shandong Hongchuang Aluminum | Ningbo Jianan vs. Rising Nonferrous Metals | Ningbo Jianan vs. China Aluminum International |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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