Correlation Between Western Metal and Shenzhen Transsion
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By analyzing existing cross correlation between Western Metal Materials and Shenzhen Transsion Holdings, you can compare the effects of market volatilities on Western Metal and Shenzhen Transsion 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 Shenzhen Transsion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Shenzhen Transsion.
Diversification Opportunities for Western Metal and Shenzhen Transsion
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Shenzhen is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Shenzhen Transsion Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Transsion 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 Shenzhen Transsion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Transsion has no effect on the direction of Western Metal i.e., Western Metal and Shenzhen Transsion go up and down completely randomly.
Pair Corralation between Western Metal and Shenzhen Transsion
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 0.61 times more return on investment than Shenzhen Transsion. However, Western Metal Materials is 1.63 times less risky than Shenzhen Transsion. It trades about 0.04 of its potential returns per unit of risk. Shenzhen Transsion Holdings is currently generating about -0.05 per unit of risk. If you would invest 1,474 in Western Metal Materials on August 29, 2024 and sell it today you would earn a total of 113.00 from holding Western Metal Materials or generate 7.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Metal Materials vs. Shenzhen Transsion Holdings
Performance |
| Timeline |
| Western Metal Materials |
| Shenzhen Transsion |
Western Metal and Shenzhen Transsion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Shenzhen Transsion
The main advantage of trading using opposite Western Metal and Shenzhen Transsion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Shenzhen Transsion 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 Shenzhen Transsion will offset losses from the drop in Shenzhen Transsion'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 |
| Shenzhen Transsion vs. Western Metal Materials | Shenzhen Transsion vs. Easyhome New Retail | Shenzhen Transsion vs. Shandong Hongchuang Aluminum | Shenzhen Transsion vs. Gansu Huangtai Wine marketing |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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