Correlation Between Western Metal and Shandong Sanyuan
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By analyzing existing cross correlation between Western Metal Materials and Shandong Sanyuan Biotechnology, you can compare the effects of market volatilities on Western Metal and Shandong Sanyuan 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 Shandong Sanyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Shandong Sanyuan.
Diversification Opportunities for Western Metal and Shandong Sanyuan
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and Shandong is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Shandong Sanyuan Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Sanyuan Bio 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 Shandong Sanyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Sanyuan Bio has no effect on the direction of Western Metal i.e., Western Metal and Shandong Sanyuan go up and down completely randomly.
Pair Corralation between Western Metal and Shandong Sanyuan
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 1.17 times more return on investment than Shandong Sanyuan. However, Western Metal is 1.17 times more volatile than Shandong Sanyuan Biotechnology. It trades about 0.03 of its potential returns per unit of risk. Shandong Sanyuan Biotechnology is currently generating about 0.0 per unit of risk. If you would invest 1,479 in Western Metal Materials on September 2, 2024 and sell it today you would earn a total of 137.00 from holding Western Metal Materials or generate 9.26% 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. Shandong Sanyuan Biotechnology
Performance |
| Timeline |
| Western Metal Materials |
| Shandong Sanyuan Bio |
Western Metal and Shandong Sanyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Shandong Sanyuan
The main advantage of trading using opposite Western Metal and Shandong Sanyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Shandong Sanyuan 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 Shandong Sanyuan will offset losses from the drop in Shandong Sanyuan'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 |
| Shandong Sanyuan vs. Tianshan Aluminum Group | Shandong Sanyuan vs. Shanghai Yanpu Metal | Shandong Sanyuan vs. Western Metal Materials | Shandong Sanyuan vs. Anhui Transport Consulting |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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