Correlation Between Western Metal and China Molybdenum
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By analyzing existing cross correlation between Western Metal Materials and China Molybdenum Co, you can compare the effects of market volatilities on Western Metal and China Molybdenum 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 China Molybdenum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and China Molybdenum.
Diversification Opportunities for Western Metal and China Molybdenum
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and China is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and China Molybdenum Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Molybdenum 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 China Molybdenum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Molybdenum has no effect on the direction of Western Metal i.e., Western Metal and China Molybdenum go up and down completely randomly.
Pair Corralation between Western Metal and China Molybdenum
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 2.53 times more return on investment than China Molybdenum. However, Western Metal is 2.53 times more volatile than China Molybdenum Co. It trades about 0.16 of its potential returns per unit of risk. China Molybdenum Co is currently generating about -0.23 per unit of risk. If you would invest 1,764 in Western Metal Materials on November 25, 2024 and sell it today you would earn a total of 146.00 from holding Western Metal Materials or generate 8.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Western Metal Materials vs. China Molybdenum Co
Performance |
Timeline |
Western Metal Materials |
China Molybdenum |
Western Metal and China Molybdenum Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Western Metal and China Molybdenum
The main advantage of trading using opposite Western Metal and China Molybdenum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, China Molybdenum 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 China Molybdenum will offset losses from the drop in China Molybdenum's long position.Western Metal vs. Jilin Jlu Communication | ||
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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