Correlation Between Western Metal and Guangzhou Automobile
Specify exactly 2 symbols:
By analyzing existing cross correlation between Western Metal Materials and Guangzhou Automobile Group, you can compare the effects of market volatilities on Western Metal and Guangzhou Automobile 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 Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Guangzhou Automobile.
Diversification Opportunities for Western Metal and Guangzhou Automobile
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Western and Guangzhou is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Guangzhou Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Automobile 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 Guangzhou Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Automobile has no effect on the direction of Western Metal i.e., Western Metal and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between Western Metal and Guangzhou Automobile
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 1.43 times more return on investment than Guangzhou Automobile. However, Western Metal is 1.43 times more volatile than Guangzhou Automobile Group. It trades about 0.02 of its potential returns per unit of risk. Guangzhou Automobile Group is currently generating about -0.03 per unit of risk. If you would invest 1,645 in Western Metal Materials on October 16, 2024 and sell it today you would earn a total of 143.00 from holding Western Metal Materials or generate 8.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Metal Materials vs. Guangzhou Automobile Group
Performance |
| Timeline |
| Western Metal Materials |
| Guangzhou Automobile |
Western Metal and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Guangzhou Automobile
The main advantage of trading using opposite Western Metal and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Guangzhou Automobile 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 Guangzhou Automobile will offset losses from the drop in Guangzhou Automobile's long position.| Western Metal vs. China Mobile Limited | Western Metal vs. Sihui Fuji Electronics | Western Metal vs. Dongguan Tarry Electronics | Western Metal vs. Tongyu Communication |
| Guangzhou Automobile vs. Jinsanjiang Silicon Material | Guangzhou Automobile vs. Kangxin New Materials | Guangzhou Automobile vs. Western Metal Materials | Guangzhou Automobile vs. Cangzhou Mingzhu Plastic |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |