Correlation Between Western Metal and Ningbo Fangzheng
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By analyzing existing cross correlation between Western Metal Materials and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on Western Metal and Ningbo Fangzheng 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 Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Ningbo Fangzheng.
Diversification Opportunities for Western Metal and Ningbo Fangzheng
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Ningbo is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Ningbo Fangzheng Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Fangzheng Aut 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 Fangzheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Fangzheng Aut has no effect on the direction of Western Metal i.e., Western Metal and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between Western Metal and Ningbo Fangzheng
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 1.22 times more return on investment than Ningbo Fangzheng. However, Western Metal is 1.22 times more volatile than Ningbo Fangzheng Automobile. It trades about 0.08 of its potential returns per unit of risk. Ningbo Fangzheng Automobile is currently generating about -0.11 per unit of risk. If you would invest 1,751 in Western Metal Materials on October 22, 2024 and sell it today you would earn a total of 86.00 from holding Western Metal Materials or generate 4.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Metal Materials vs. Ningbo Fangzheng Automobile
Performance |
| Timeline |
| Western Metal Materials |
| Ningbo Fangzheng Aut |
Western Metal and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Ningbo Fangzheng
The main advantage of trading using opposite Western Metal and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Ningbo Fangzheng 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 Fangzheng will offset losses from the drop in Ningbo Fangzheng's long position.| Western Metal vs. CareRay Digital Medical | Western Metal vs. Xiangyu Medical Co | Western Metal vs. Sharetronic Data Technology | Western Metal vs. 360 Security Technology |
| Ningbo Fangzheng vs. Meinian Onehealth Healthcare | Ningbo Fangzheng vs. Western Metal Materials | Ningbo Fangzheng vs. Anhui Transport Consulting | Ningbo Fangzheng vs. Rising Nonferrous Metals |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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