Correlation Between Western Copper and CHINA EAST
Can any of the company-specific risk be diversified away by investing in both Western Copper and CHINA EAST at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Western Copper and CHINA EAST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Copper and and CHINA EAST ED, you can compare the effects of market volatilities on Western Copper and CHINA EAST 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 Copper with a short position of CHINA EAST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and CHINA EAST.
Diversification Opportunities for Western Copper and CHINA EAST
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Western and CHINA is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and CHINA EAST ED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA EAST ED and Western Copper 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 Copper and are associated (or correlated) with CHINA EAST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA EAST ED has no effect on the direction of Western Copper i.e., Western Copper and CHINA EAST go up and down completely randomly.
Pair Corralation between Western Copper and CHINA EAST
Assuming the 90 days trading horizon Western Copper and is expected to under-perform the CHINA EAST. In addition to that, Western Copper is 2.43 times more volatile than CHINA EAST ED. It trades about -0.13 of its total potential returns per unit of risk. CHINA EAST ED is currently generating about 0.01 per unit of volatility. If you would invest 30.00 in CHINA EAST ED on November 6, 2024 and sell it today you would earn a total of 0.00 from holding CHINA EAST ED or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Copper and vs. CHINA EAST ED
Performance |
| Timeline |
| Western Copper |
| CHINA EAST ED |
Western Copper and CHINA EAST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and CHINA EAST
The main advantage of trading using opposite Western Copper and CHINA EAST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, CHINA EAST 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 EAST will offset losses from the drop in CHINA EAST's long position.| Western Copper vs. ON SEMICONDUCTOR | Western Copper vs. TOREX SEMICONDUCTOR LTD | Western Copper vs. FLOW TRADERS LTD | Western Copper vs. Siamgas And Petrochemicals |
| CHINA EAST vs. EPSILON HEALTHCARE LTD | CHINA EAST vs. MPH Health Care | CHINA EAST vs. Planet Fitness | CHINA EAST vs. National Health Investors |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |