Correlation Between King Strong and China Minmetals
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By analyzing existing cross correlation between King Strong New Material and China Minmetals Rare, you can compare the effects of market volatilities on King Strong and China Minmetals 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 King Strong with a short position of China Minmetals. Check out your portfolio center. Please also check ongoing floating volatility patterns of King Strong and China Minmetals.
Diversification Opportunities for King Strong and China Minmetals
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between King and China is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding King Strong New Material and China Minmetals Rare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Minmetals Rare and King Strong 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 King Strong New Material are associated (or correlated) with China Minmetals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Minmetals Rare has no effect on the direction of King Strong i.e., King Strong and China Minmetals go up and down completely randomly.
Pair Corralation between King Strong and China Minmetals
Assuming the 90 days trading horizon King Strong New Material is expected to generate 1.24 times more return on investment than China Minmetals. However, King Strong is 1.24 times more volatile than China Minmetals Rare. It trades about 0.05 of its potential returns per unit of risk. China Minmetals Rare is currently generating about 0.05 per unit of risk. If you would invest 1,522 in King Strong New Material on October 29, 2024 and sell it today you would earn a total of 518.00 from holding King Strong New Material or generate 34.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
King Strong New Material vs. China Minmetals Rare
Performance |
| Timeline |
| King Strong New |
| China Minmetals Rare |
King Strong and China Minmetals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with King Strong and China Minmetals
The main advantage of trading using opposite King Strong and China Minmetals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if King Strong position performs unexpectedly, China Minmetals 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 China Minmetals will offset losses from the drop in China Minmetals' long position.| King Strong vs. UE Furniture Co | King Strong vs. Luolai Home Textile | King Strong vs. Tongding Interconnection Information | King Strong vs. Nanxing Furniture Machinery |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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