Correlation Between Western Metal and Shuhua Sports
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By analyzing existing cross correlation between Western Metal Materials and Shuhua Sports Co, you can compare the effects of market volatilities on Western Metal and Shuhua Sports 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 Shuhua Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Shuhua Sports.
Diversification Opportunities for Western Metal and Shuhua Sports
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Western and Shuhua is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Shuhua Sports Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shuhua Sports 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 Shuhua Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shuhua Sports has no effect on the direction of Western Metal i.e., Western Metal and Shuhua Sports go up and down completely randomly.
Pair Corralation between Western Metal and Shuhua Sports
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 0.96 times more return on investment than Shuhua Sports. However, Western Metal Materials is 1.04 times less risky than Shuhua Sports. It trades about 0.24 of its potential returns per unit of risk. Shuhua Sports Co is currently generating about -0.16 per unit of risk. If you would invest 1,559 in Western Metal Materials on October 15, 2024 and sell it today you would earn a total of 288.00 from holding Western Metal Materials or generate 18.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Metal Materials vs. Shuhua Sports Co
Performance |
| Timeline |
| Western Metal Materials |
| Shuhua Sports |
Western Metal and Shuhua Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Shuhua Sports
The main advantage of trading using opposite Western Metal and Shuhua Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Shuhua Sports 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 Shuhua Sports will offset losses from the drop in Shuhua Sports' 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 |
| Shuhua Sports vs. Fujian Anjoy Foods | Shuhua Sports vs. Ligao Foods CoLtd | Shuhua Sports vs. Jilin Chemical Fibre | Shuhua Sports vs. Jinsanjiang Silicon Material |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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