Correlation Between Zhejiang Construction and Western Mining
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By analyzing existing cross correlation between Zhejiang Construction Investment and Western Mining Co, you can compare the effects of market volatilities on Zhejiang Construction 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 Zhejiang Construction with a short position of Western Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Construction and Western Mining.
Diversification Opportunities for Zhejiang Construction and Western Mining
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and Western is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Construction Investme and Western Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Mining and Zhejiang Construction 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 Zhejiang Construction Investment 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 Zhejiang Construction i.e., Zhejiang Construction and Western Mining go up and down completely randomly.
Pair Corralation between Zhejiang Construction and Western Mining
Assuming the 90 days trading horizon Zhejiang Construction Investment is expected to generate 1.33 times more return on investment than Western Mining. However, Zhejiang Construction is 1.33 times more volatile than Western Mining Co. It trades about 0.06 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 851.00 in Zhejiang Construction Investment on September 3, 2024 and sell it today you would earn a total of 168.00 from holding Zhejiang Construction Investment or generate 19.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.17% |
| Values | Daily Returns |
Zhejiang Construction Investme vs. Western Mining Co
Performance |
| Timeline |
| Zhejiang Construction |
| Western Mining |
Zhejiang Construction and Western Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Construction and Western Mining
The main advantage of trading using opposite Zhejiang Construction and Western Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Construction 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.| Zhejiang Construction vs. Chengdu Spaceon Electronics | Zhejiang Construction vs. Anhui Gujing Distillery | Zhejiang Construction vs. Western Metal Materials | Zhejiang Construction vs. China Asset Management |
| Western Mining vs. Zijin Mining Group | Western Mining vs. Baoshan Iron Steel | Western Mining vs. Hoshine Silicon Ind |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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