Correlation Between Western Metal and Inner Mongolia
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By analyzing existing cross correlation between Western Metal Materials and Inner Mongolia BaoTou, you can compare the effects of market volatilities on Western Metal and Inner Mongolia 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 Inner Mongolia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Inner Mongolia.
Diversification Opportunities for Western Metal and Inner Mongolia
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and Inner is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Inner Mongolia BaoTou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inner Mongolia BaoTou 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 Inner Mongolia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inner Mongolia BaoTou has no effect on the direction of Western Metal i.e., Western Metal and Inner Mongolia go up and down completely randomly.
Pair Corralation between Western Metal and Inner Mongolia
Assuming the 90 days trading horizon Western Metal Materials is expected to under-perform the Inner Mongolia. But the stock apears to be less risky and, when comparing its historical volatility, Western Metal Materials is 1.2 times less risky than Inner Mongolia. The stock trades about 0.0 of its potential returns per unit of risk. The Inner Mongolia BaoTou is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 175.00 in Inner Mongolia BaoTou on August 29, 2024 and sell it today you would earn a total of 21.00 from holding Inner Mongolia BaoTou or generate 12.0% 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. Inner Mongolia BaoTou
Performance |
| Timeline |
| Western Metal Materials |
| Inner Mongolia BaoTou |
Western Metal and Inner Mongolia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Inner Mongolia
The main advantage of trading using opposite Western Metal and Inner Mongolia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Inner Mongolia 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 Inner Mongolia will offset losses from the drop in Inner Mongolia'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 |
| Inner Mongolia vs. Xiangyang Automobile Bearing | Inner Mongolia vs. Heren Health Co | Inner Mongolia vs. Sinomach Automobile Co | Inner Mongolia vs. Anhui Jianghuai Automobile |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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