Correlation Between Western Metal and Hainan Mining
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By analyzing existing cross correlation between Western Metal Materials and Hainan Mining Co, you can compare the effects of market volatilities on Western Metal and Hainan Mining 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 Hainan Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Hainan Mining.
Diversification Opportunities for Western Metal and Hainan Mining
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and Hainan is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Hainan Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan 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 Hainan Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Mining has no effect on the direction of Western Metal i.e., Western Metal and Hainan Mining go up and down completely randomly.
Pair Corralation between Western Metal and Hainan Mining
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 1.13 times more return on investment than Hainan Mining. However, Western Metal is 1.13 times more volatile than Hainan Mining Co. It trades about 0.02 of its potential returns per unit of risk. Hainan Mining Co is currently generating about 0.01 per unit of risk. If you would invest 1,507 in Western Metal Materials on September 1, 2024 and sell it today you would earn a total of 109.00 from holding Western Metal Materials or generate 7.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Metal Materials vs. Hainan Mining Co
Performance |
| Timeline |
| Western Metal Materials |
| Hainan Mining |
Western Metal and Hainan Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Hainan Mining
The main advantage of trading using opposite Western Metal and Hainan Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Hainan Mining 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 Hainan Mining will offset losses from the drop in Hainan Mining'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 |
| Hainan Mining vs. Zijin Mining Group | Hainan Mining vs. Wanhua Chemical Group | Hainan Mining vs. Baoshan Iron Steel | Hainan Mining vs. Shandong Gold Mining |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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