Correlation Between Western Metal and Huafa Industrial
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By analyzing existing cross correlation between Western Metal Materials and Huafa Industrial Co, you can compare the effects of market volatilities on Western Metal and Huafa Industrial 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 Huafa Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Huafa Industrial.
Diversification Opportunities for Western Metal and Huafa Industrial
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and Huafa is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Huafa Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huafa Industrial 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 Huafa Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huafa Industrial has no effect on the direction of Western Metal i.e., Western Metal and Huafa Industrial go up and down completely randomly.
Pair Corralation between Western Metal and Huafa Industrial
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 2.19 times more return on investment than Huafa Industrial. However, Western Metal is 2.19 times more volatile than Huafa Industrial Co. It trades about 0.13 of its potential returns per unit of risk. Huafa Industrial Co is currently generating about 0.21 per unit of risk. If you would invest 1,720 in Western Metal Materials on December 1, 2024 and sell it today you would earn a total of 124.00 from holding Western Metal Materials or generate 7.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Metal Materials vs. Huafa Industrial Co
Performance |
| Timeline |
| Western Metal Materials |
| Huafa Industrial |
Western Metal and Huafa Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Huafa Industrial
The main advantage of trading using opposite Western Metal and Huafa Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Huafa Industrial 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 Huafa Industrial will offset losses from the drop in Huafa Industrial's long position.| Western Metal vs. Dezhan HealthCare Co | Western Metal vs. Meinian Onehealth Healthcare | Western Metal vs. Anhui Transport Consulting | Western Metal vs. Anhui Huaren Health |
| Huafa Industrial vs. Jinling Hotel Corp | Huafa Industrial vs. Chongqing Sulian Plastic | Huafa Industrial vs. Shengda Mining Co | Huafa Industrial vs. Hengerda New Materials |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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