Correlation Between Western Metal and Zhengzhou Coal
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By analyzing existing cross correlation between Western Metal Materials and Zhengzhou Coal Mining, you can compare the effects of market volatilities on Western Metal and Zhengzhou Coal 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 Zhengzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Zhengzhou Coal.
Diversification Opportunities for Western Metal and Zhengzhou Coal
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Western and Zhengzhou is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Zhengzhou Coal Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhengzhou Coal Mining 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 Zhengzhou Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhengzhou Coal Mining has no effect on the direction of Western Metal i.e., Western Metal and Zhengzhou Coal go up and down completely randomly.
Pair Corralation between Western Metal and Zhengzhou Coal
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 3.65 times more return on investment than Zhengzhou Coal. However, Western Metal is 3.65 times more volatile than Zhengzhou Coal Mining. It trades about 0.12 of its potential returns per unit of risk. Zhengzhou Coal Mining is currently generating about -0.14 per unit of risk. If you would invest 1,585 in Western Metal Materials on October 12, 2024 and sell it today you would earn a total of 130.00 from holding Western Metal Materials or generate 8.2% 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. Zhengzhou Coal Mining
Performance |
| Timeline |
| Western Metal Materials |
| Zhengzhou Coal Mining |
Western Metal and Zhengzhou Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Zhengzhou Coal
The main advantage of trading using opposite Western Metal and Zhengzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Zhengzhou Coal 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 Zhengzhou Coal will offset losses from the drop in Zhengzhou Coal's long position.| Western Metal vs. Xiandai Investment Co | Western Metal vs. Jiangsu Yueda Investment | Western Metal vs. Hunan Investment Group | Western Metal vs. Nanjing Vishee Medical |
| Zhengzhou Coal vs. BYD Co Ltd | Zhengzhou Coal vs. China Mobile Limited | Zhengzhou Coal vs. Agricultural Bank of | Zhengzhou Coal vs. Industrial and Commercial |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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