Correlation Between Western Metal and Xilinmen Furniture
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By analyzing existing cross correlation between Western Metal Materials and Xilinmen Furniture Co, you can compare the effects of market volatilities on Western Metal and Xilinmen Furniture 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 Xilinmen Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Xilinmen Furniture.
Diversification Opportunities for Western Metal and Xilinmen Furniture
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and Xilinmen is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Xilinmen Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilinmen Furniture 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 Xilinmen Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilinmen Furniture has no effect on the direction of Western Metal i.e., Western Metal and Xilinmen Furniture go up and down completely randomly.
Pair Corralation between Western Metal and Xilinmen Furniture
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 1.09 times more return on investment than Xilinmen Furniture. However, Western Metal is 1.09 times more volatile than Xilinmen Furniture Co. It trades about 0.02 of its potential returns per unit of risk. Xilinmen Furniture Co is currently generating about 0.01 per unit of risk. If you would invest 1,513 in Western Metal Materials on September 14, 2024 and sell it today you would earn a total of 91.00 from holding Western Metal Materials or generate 6.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.62% |
| Values | Daily Returns |
Western Metal Materials vs. Xilinmen Furniture Co
Performance |
| Timeline |
| Western Metal Materials |
| Xilinmen Furniture |
Western Metal and Xilinmen Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Xilinmen Furniture
The main advantage of trading using opposite Western Metal and Xilinmen Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Xilinmen Furniture 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 Xilinmen Furniture will offset losses from the drop in Xilinmen Furniture'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 |
| Xilinmen Furniture vs. Western Metal Materials | Xilinmen Furniture vs. Xinjiang Communications Construction | Xilinmen Furniture vs. Guangdong Qunxing Toys | Xilinmen Furniture vs. Hainan Airlines Co |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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