Correlation Between Gansu Jiu and Western Metal
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By analyzing existing cross correlation between Gansu Jiu Steel and Western Metal Materials, you can compare the effects of market volatilities on Gansu Jiu and Western Metal 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 Gansu Jiu with a short position of Western Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Western Metal.
Diversification Opportunities for Gansu Jiu and Western Metal
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gansu and Western is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Western Metal Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Metal Materials and Gansu Jiu 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 Gansu Jiu Steel are associated (or correlated) with Western Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Metal Materials has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Western Metal go up and down completely randomly.
Pair Corralation between Gansu Jiu and Western Metal
Assuming the 90 days trading horizon Gansu Jiu is expected to generate 1.54 times less return on investment than Western Metal. But when comparing it to its historical volatility, Gansu Jiu Steel is 1.22 times less risky than Western Metal. It trades about 0.02 of its potential returns per unit of risk. Western Metal Materials is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,479 in Western Metal Materials on September 2, 2024 and sell it today you would earn a total of 137.00 from holding Western Metal Materials or generate 9.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Western Metal Materials
Performance |
| Timeline |
| Gansu Jiu Steel |
| Western Metal Materials |
Gansu Jiu and Western Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Western Metal
The main advantage of trading using opposite Gansu Jiu and Western Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Western Metal 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 Metal will offset losses from the drop in Western Metal's long position.| Gansu Jiu vs. Western Metal Materials | Gansu Jiu vs. Chengtun Mining Group | Gansu Jiu vs. Uroica Mining Safety | Gansu Jiu vs. Beijing HuaYuanYiTong Thermal |
| Western Metal vs. Zijin Mining Group | Western Metal vs. Wanhua Chemical Group | Western Metal vs. Baoshan Iron Steel | Western Metal vs. Shandong Gold Mining |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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