Correlation Between Western Metal and Kunshan Guoli
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By analyzing existing cross correlation between Western Metal Materials and Kunshan Guoli Electronic, you can compare the effects of market volatilities on Western Metal and Kunshan Guoli 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 Kunshan Guoli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Kunshan Guoli.
Diversification Opportunities for Western Metal and Kunshan Guoli
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and Kunshan is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Kunshan Guoli Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kunshan Guoli Electronic 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 Kunshan Guoli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kunshan Guoli Electronic has no effect on the direction of Western Metal i.e., Western Metal and Kunshan Guoli go up and down completely randomly.
Pair Corralation between Western Metal and Kunshan Guoli
Assuming the 90 days trading horizon Western Metal is expected to generate 3.07 times less return on investment than Kunshan Guoli. But when comparing it to its historical volatility, Western Metal Materials is 1.33 times less risky than Kunshan Guoli. It trades about 0.02 of its potential returns per unit of risk. Kunshan Guoli Electronic is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,200 in Kunshan Guoli Electronic on September 2, 2024 and sell it today you would earn a total of 60.00 from holding Kunshan Guoli Electronic or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Metal Materials vs. Kunshan Guoli Electronic
Performance |
| Timeline |
| Western Metal Materials |
| Kunshan Guoli Electronic |
Western Metal and Kunshan Guoli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Kunshan Guoli
The main advantage of trading using opposite Western Metal and Kunshan Guoli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Kunshan Guoli 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 Kunshan Guoli will offset losses from the drop in Kunshan Guoli'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 |
| Kunshan Guoli vs. HaiXin Foods Co | Kunshan Guoli vs. Guangdong Brandmax Marketing | Kunshan Guoli vs. Youyou Foods Co | Kunshan Guoli vs. Gan Yuan Foods |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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