Correlation Between Western Metal and Qingdao NovelBeam
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By analyzing existing cross correlation between Western Metal Materials and Qingdao NovelBeam Technology, you can compare the effects of market volatilities on Western Metal and Qingdao NovelBeam 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 Qingdao NovelBeam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Qingdao NovelBeam.
Diversification Opportunities for Western Metal and Qingdao NovelBeam
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and Qingdao is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Qingdao NovelBeam Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingdao NovelBeam 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 Qingdao NovelBeam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingdao NovelBeam has no effect on the direction of Western Metal i.e., Western Metal and Qingdao NovelBeam go up and down completely randomly.
Pair Corralation between Western Metal and Qingdao NovelBeam
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 0.92 times more return on investment than Qingdao NovelBeam. However, Western Metal Materials is 1.09 times less risky than Qingdao NovelBeam. It trades about 0.02 of its potential returns per unit of risk. Qingdao NovelBeam Technology is currently generating about -0.05 per unit of risk. If you would invest 1,470 in Western Metal Materials on August 29, 2024 and sell it today you would earn a total of 173.00 from holding Western Metal Materials or generate 11.77% 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. Qingdao NovelBeam Technology
Performance |
| Timeline |
| Western Metal Materials |
| Qingdao NovelBeam |
Western Metal and Qingdao NovelBeam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Metal and Qingdao NovelBeam
The main advantage of trading using opposite Western Metal and Qingdao NovelBeam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Qingdao NovelBeam 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 Qingdao NovelBeam will offset losses from the drop in Qingdao NovelBeam's long position.| Western Metal vs. Shandong Gold Mining | Western Metal vs. Rongsheng Petrochemical Co | Western Metal vs. Inner Mongolia BaoTou | Western Metal vs. Jiangxi Ganfeng Lithium |
| Qingdao NovelBeam vs. Industrial and Commercial | Qingdao NovelBeam vs. China Construction Bank | Qingdao NovelBeam vs. Agricultural Bank of | Qingdao NovelBeam vs. Bank of China |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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