Correlation Between Western Metal and Shanghai Rongtai
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By analyzing existing cross correlation between Western Metal Materials and Shanghai Rongtai Health, you can compare the effects of market volatilities on Western Metal and Shanghai Rongtai 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 Shanghai Rongtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Shanghai Rongtai.
Diversification Opportunities for Western Metal and Shanghai Rongtai
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and Shanghai is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Shanghai Rongtai Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Rongtai Health 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 Shanghai Rongtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Rongtai Health has no effect on the direction of Western Metal i.e., Western Metal and Shanghai Rongtai go up and down completely randomly.
Pair Corralation between Western Metal and Shanghai Rongtai
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 1.02 times more return on investment than Shanghai Rongtai. However, Western Metal is 1.02 times more volatile than Shanghai Rongtai Health. It trades about 0.03 of its potential returns per unit of risk. Shanghai Rongtai Health is currently generating about -0.02 per unit of risk. If you would invest 1,432 in Western Metal Materials on September 4, 2024 and sell it today you would earn a total of 186.00 from holding Western Metal Materials or generate 12.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Metal Materials vs. Shanghai Rongtai Health
Performance |
| Timeline |
| Western Metal Materials |
| Shanghai Rongtai Health |
Western Metal and Shanghai Rongtai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Shanghai Rongtai
The main advantage of trading using opposite Western Metal and Shanghai Rongtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Shanghai Rongtai 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 Shanghai Rongtai will offset losses from the drop in Shanghai Rongtai's long position.| Western Metal vs. Techshine Electronics Co | Western Metal vs. Leaguer Shenzhen MicroElectronics | Western Metal vs. Suzhou Weizhixiang Food | Western Metal vs. Guilin Seamild Foods |
| Shanghai Rongtai vs. Shenzhen MYS Environmental | Shanghai Rongtai vs. Sinosteel Engineering and | Shanghai Rongtai vs. Qijing Machinery | Shanghai Rongtai vs. Ningbo Construction 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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