Correlation Between Western Metal and Jiangsu Xinri
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By analyzing existing cross correlation between Western Metal Materials and Jiangsu Xinri E Vehicle, you can compare the effects of market volatilities on Western Metal and Jiangsu Xinri 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 Jiangsu Xinri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Jiangsu Xinri.
Diversification Opportunities for Western Metal and Jiangsu Xinri
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Jiangsu is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Jiangsu Xinri E Vehicle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Xinri E 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 Jiangsu Xinri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Xinri E has no effect on the direction of Western Metal i.e., Western Metal and Jiangsu Xinri go up and down completely randomly.
Pair Corralation between Western Metal and Jiangsu Xinri
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 1.62 times more return on investment than Jiangsu Xinri. However, Western Metal is 1.62 times more volatile than Jiangsu Xinri E Vehicle. It trades about 0.19 of its potential returns per unit of risk. Jiangsu Xinri E Vehicle is currently generating about -0.37 per unit of risk. If you would invest 1,559 in Western Metal Materials on October 16, 2024 and sell it today you would earn a total of 229.00 from holding Western Metal Materials or generate 14.69% 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. Jiangsu Xinri E Vehicle
Performance |
| Timeline |
| Western Metal Materials |
| Jiangsu Xinri E |
Western Metal and Jiangsu Xinri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Jiangsu Xinri
The main advantage of trading using opposite Western Metal and Jiangsu Xinri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Jiangsu Xinri 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 Jiangsu Xinri will offset losses from the drop in Jiangsu Xinri's long position.| Western Metal vs. China Mobile Limited | Western Metal vs. Sihui Fuji Electronics | Western Metal vs. Dongguan Tarry Electronics | Western Metal vs. Tongyu Communication |
| Jiangsu Xinri vs. Kingclean Electric Co | Jiangsu Xinri vs. Orinko Advanced Plastics | Jiangsu Xinri vs. Western Metal Materials | Jiangsu Xinri vs. Keda Clean Energy |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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