Correlation Between Western Metal and Fujian Oriental
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By analyzing existing cross correlation between Western Metal Materials and Fujian Oriental Silver, you can compare the effects of market volatilities on Western Metal and Fujian Oriental 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 Fujian Oriental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Fujian Oriental.
Diversification Opportunities for Western Metal and Fujian Oriental
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and Fujian is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Fujian Oriental Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Oriental Silver 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 Fujian Oriental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Oriental Silver has no effect on the direction of Western Metal i.e., Western Metal and Fujian Oriental go up and down completely randomly.
Pair Corralation between Western Metal and Fujian Oriental
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 1.0 times more return on investment than Fujian Oriental. However, Western Metal Materials is 1.0 times less risky than Fujian Oriental. It trades about -0.05 of its potential returns per unit of risk. Fujian Oriental Silver is currently generating about -0.11 per unit of risk. If you would invest 1,687 in Western Metal Materials on September 1, 2024 and sell it today you would lose (71.00) from holding Western Metal Materials or give up 4.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Metal Materials vs. Fujian Oriental Silver
Performance |
| Timeline |
| Western Metal Materials |
| Fujian Oriental Silver |
Western Metal and Fujian Oriental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Fujian Oriental
The main advantage of trading using opposite Western Metal and Fujian Oriental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Fujian Oriental 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 Fujian Oriental will offset losses from the drop in Fujian Oriental'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 |
| Fujian Oriental vs. Harvest Fund Management | Fujian Oriental vs. Qingdao Foods Co | Fujian Oriental vs. Shantou Wanshun Package | Fujian Oriental vs. Beijing Sanyuan Foods |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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