Correlation Between Western Metal and Beijing YanDong
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By analyzing existing cross correlation between Western Metal Materials and Beijing YanDong MicroElectronic, you can compare the effects of market volatilities on Western Metal and Beijing YanDong 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 Beijing YanDong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Beijing YanDong.
Diversification Opportunities for Western Metal and Beijing YanDong
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Beijing is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Beijing YanDong MicroElectroni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing YanDong Micr 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 Beijing YanDong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing YanDong Micr has no effect on the direction of Western Metal i.e., Western Metal and Beijing YanDong go up and down completely randomly.
Pair Corralation between Western Metal and Beijing YanDong
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 1.51 times more return on investment than Beijing YanDong. However, Western Metal is 1.51 times more volatile than Beijing YanDong MicroElectronic. It trades about -0.01 of its potential returns per unit of risk. Beijing YanDong MicroElectronic is currently generating about -0.06 per unit of risk. If you would invest 1,802 in Western Metal Materials on October 29, 2024 and sell it today you would lose (38.00) from holding Western Metal Materials or give up 2.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Metal Materials vs. Beijing YanDong MicroElectroni
Performance |
| Timeline |
| Western Metal Materials |
| Beijing YanDong Micr |
Western Metal and Beijing YanDong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Beijing YanDong
The main advantage of trading using opposite Western Metal and Beijing YanDong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Beijing YanDong 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 Beijing YanDong will offset losses from the drop in Beijing YanDong'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 |
| Beijing YanDong vs. Semiconductor Manufacturing Electronics | Beijing YanDong vs. Chongqing Road Bridge | Beijing YanDong vs. LianChuang Electronic Technology | Beijing YanDong vs. Road Environment Technology |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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