Correlation Between Western Metal and Dalian Thermal
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By analyzing existing cross correlation between Western Metal Materials and Dalian Thermal Power, you can compare the effects of market volatilities on Western Metal and Dalian Thermal 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 Dalian Thermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Dalian Thermal.
Diversification Opportunities for Western Metal and Dalian Thermal
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Dalian is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Dalian Thermal Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalian Thermal Power 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 Dalian Thermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalian Thermal Power has no effect on the direction of Western Metal i.e., Western Metal and Dalian Thermal go up and down completely randomly.
Pair Corralation between Western Metal and Dalian Thermal
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 0.72 times more return on investment than Dalian Thermal. However, Western Metal Materials is 1.4 times less risky than Dalian Thermal. It trades about 0.09 of its potential returns per unit of risk. Dalian Thermal Power is currently generating about -0.01 per unit of risk. If you would invest 1,293 in Western Metal Materials on November 3, 2024 and sell it today you would earn a total of 407.00 from holding Western Metal Materials or generate 31.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Metal Materials vs. Dalian Thermal Power
Performance |
| Timeline |
| Western Metal Materials |
| Dalian Thermal Power |
Western Metal and Dalian Thermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Dalian Thermal
The main advantage of trading using opposite Western Metal and Dalian Thermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Dalian Thermal 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 Dalian Thermal will offset losses from the drop in Dalian Thermal's long position.| Western Metal vs. Kingclean Electric Co | Western Metal vs. Hangzhou Zhongya Machinery | Western Metal vs. Guangzhou KDT Machinery | Western Metal vs. Masterwork Machinery |
| Dalian Thermal vs. Zhejiang Publishing Media | Dalian Thermal vs. Time Publishing and | Dalian Thermal vs. Heilongjiang Publishing Media | Dalian Thermal vs. CSSC Offshore Marine |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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