Correlation Between Rising Nonferrous and Weichai Heavy
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By analyzing existing cross correlation between Rising Nonferrous Metals and Weichai Heavy Machinery, you can compare the effects of market volatilities on Rising Nonferrous and Weichai Heavy 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 Rising Nonferrous with a short position of Weichai Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rising Nonferrous and Weichai Heavy.
Diversification Opportunities for Rising Nonferrous and Weichai Heavy
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rising and Weichai is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Rising Nonferrous Metals and Weichai Heavy Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weichai Heavy Machinery and Rising Nonferrous 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 Rising Nonferrous Metals are associated (or correlated) with Weichai Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weichai Heavy Machinery has no effect on the direction of Rising Nonferrous i.e., Rising Nonferrous and Weichai Heavy go up and down completely randomly.
Pair Corralation between Rising Nonferrous and Weichai Heavy
Assuming the 90 days trading horizon Rising Nonferrous is expected to generate 1.85 times less return on investment than Weichai Heavy. But when comparing it to its historical volatility, Rising Nonferrous Metals is 1.27 times less risky than Weichai Heavy. It trades about 0.11 of its potential returns per unit of risk. Weichai Heavy Machinery is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 861.00 in Weichai Heavy Machinery on September 3, 2024 and sell it today you would earn a total of 347.00 from holding Weichai Heavy Machinery or generate 40.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rising Nonferrous Metals vs. Weichai Heavy Machinery
Performance |
| Timeline |
| Rising Nonferrous Metals |
| Weichai Heavy Machinery |
Rising Nonferrous and Weichai Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rising Nonferrous and Weichai Heavy
The main advantage of trading using opposite Rising Nonferrous and Weichai Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rising Nonferrous position performs unexpectedly, Weichai Heavy 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 Weichai Heavy will offset losses from the drop in Weichai Heavy's long position.| Rising Nonferrous vs. Zijin Mining Group | Rising Nonferrous vs. Baoshan Iron Steel | Rising Nonferrous vs. Rongsheng Petrochemical Co | Rising Nonferrous vs. Hoshine Silicon Ind |
| Weichai Heavy vs. Guangdong Jingyi Metal | Weichai Heavy vs. Shandong Hongchuang Aluminum | Weichai Heavy vs. Jiaozuo Wanfang Aluminum | Weichai Heavy vs. Rising Nonferrous Metals |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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