Correlation Between Longxing Chemical and Western Mining
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By analyzing existing cross correlation between Longxing Chemical Stock and Western Mining Co, you can compare the effects of market volatilities on Longxing Chemical and Western Mining 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 Longxing Chemical with a short position of Western Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longxing Chemical and Western Mining.
Diversification Opportunities for Longxing Chemical and Western Mining
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Longxing and Western is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Longxing Chemical Stock and Western Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Mining and Longxing Chemical 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 Longxing Chemical Stock are associated (or correlated) with Western Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Mining has no effect on the direction of Longxing Chemical i.e., Longxing Chemical and Western Mining go up and down completely randomly.
Pair Corralation between Longxing Chemical and Western Mining
Assuming the 90 days trading horizon Longxing Chemical Stock is expected to generate 2.3 times more return on investment than Western Mining. However, Longxing Chemical is 2.3 times more volatile than Western Mining Co. It trades about 0.08 of its potential returns per unit of risk. Western Mining Co is currently generating about 0.01 per unit of risk. If you would invest 490.00 in Longxing Chemical Stock on October 16, 2024 and sell it today you would earn a total of 48.00 from holding Longxing Chemical Stock or generate 9.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Longxing Chemical Stock vs. Western Mining Co
Performance |
| Timeline |
| Longxing Chemical Stock |
| Western Mining |
Longxing Chemical and Western Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longxing Chemical and Western Mining
The main advantage of trading using opposite Longxing Chemical and Western Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longxing Chemical position performs unexpectedly, Western Mining 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 Western Mining will offset losses from the drop in Western Mining's long position.| Longxing Chemical vs. Thinkon Semiconductor Jinzhou | Longxing Chemical vs. Union Semiconductor Co | Longxing Chemical vs. Dongguan Tarry Electronics | Longxing Chemical vs. Giantec Semiconductor Corp |
| Western Mining vs. Dosilicon Co | Western Mining vs. Longxing Chemical Stock | Western Mining vs. Mengtian Home Group | Western Mining vs. Shandong Rike Chemical |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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