Correlation Between Western Metal and Bank of Communications
Specify exactly 2 symbols:
By analyzing existing cross correlation between Western Metal Materials and Bank of Communications, you can compare the effects of market volatilities on Western Metal and Bank of Communications 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 Bank of Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Bank of Communications.
Diversification Opportunities for Western Metal and Bank of Communications
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Bank is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Bank of Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Communications 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 Bank of Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Communications has no effect on the direction of Western Metal i.e., Western Metal and Bank of Communications go up and down completely randomly.
Pair Corralation between Western Metal and Bank of Communications
Assuming the 90 days trading horizon Western Metal is expected to generate 1.68 times less return on investment than Bank of Communications. In addition to that, Western Metal is 1.95 times more volatile than Bank of Communications. It trades about 0.03 of its total potential returns per unit of risk. Bank of Communications is currently generating about 0.08 per unit of volatility. If you would invest 444.00 in Bank of Communications on August 24, 2024 and sell it today you would earn a total of 264.00 from holding Bank of Communications or generate 59.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Metal Materials vs. Bank of Communications
Performance |
| Timeline |
| Western Metal Materials |
| Bank of Communications |
Western Metal and Bank of Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Bank of Communications
The main advantage of trading using opposite Western Metal and Bank of Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Bank of Communications 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 Bank of Communications will offset losses from the drop in Bank of Communications' long position.| Western Metal vs. Ningbo Jianan Electronics | Western Metal vs. Spring Airlines Co | Western Metal vs. Bomin Electronics Co | Western Metal vs. Innovative Medical Management |
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.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |