Correlation Between Western Metal and China Aluminum
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By analyzing existing cross correlation between Western Metal Materials and China Aluminum International, you can compare the effects of market volatilities on Western Metal and China Aluminum 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 China Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and China Aluminum.
Diversification Opportunities for Western Metal and China Aluminum
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and China is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and China Aluminum International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Aluminum Inter 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 China Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Aluminum Inter has no effect on the direction of Western Metal i.e., Western Metal and China Aluminum go up and down completely randomly.
Pair Corralation between Western Metal and China Aluminum
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 2.61 times more return on investment than China Aluminum. However, Western Metal is 2.61 times more volatile than China Aluminum International. It trades about 0.12 of its potential returns per unit of risk. China Aluminum International is currently generating about 0.0 per unit of risk. If you would invest 1,602 in Western Metal Materials on November 5, 2024 and sell it today you would earn a total of 98.00 from holding Western Metal Materials or generate 6.12% 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. China Aluminum International
Performance |
| Timeline |
| Western Metal Materials |
| China Aluminum Inter |
Western Metal and China Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and China Aluminum
The main advantage of trading using opposite Western Metal and China Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, China Aluminum 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 China Aluminum will offset losses from the drop in China Aluminum's long position.| Western Metal vs. Xinjiang Baodi Mining | Western Metal vs. Ningbo Jintian Copper | Western Metal vs. Chengtun Mining Group | Western Metal vs. Tibet Huayu Mining |
| China Aluminum vs. Linewell Software Co | China Aluminum vs. Kangping Technology Co | China Aluminum vs. HanS Laser Tech | China Aluminum vs. Olympic Circuit Technology |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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