Correlation Between Wuhan Yangtze and Western Mining
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By analyzing existing cross correlation between Wuhan Yangtze Communication and Western Mining Co, you can compare the effects of market volatilities on Wuhan Yangtze 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 Wuhan Yangtze with a short position of Western Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and Western Mining.
Diversification Opportunities for Wuhan Yangtze and Western Mining
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wuhan and Western is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and Western Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Mining and Wuhan Yangtze 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 Wuhan Yangtze Communication 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 Wuhan Yangtze i.e., Wuhan Yangtze and Western Mining go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and Western Mining
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to generate 3.61 times more return on investment than Western Mining. However, Wuhan Yangtze is 3.61 times more volatile than Western Mining Co. It trades about 0.39 of its potential returns per unit of risk. Western Mining Co is currently generating about -0.21 per unit of risk. If you would invest 1,818 in Wuhan Yangtze Communication on September 2, 2024 and sell it today you would earn a total of 1,151 from holding Wuhan Yangtze Communication or generate 63.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuhan Yangtze Communication vs. Western Mining Co
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| Western Mining |
Wuhan Yangtze and Western Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and Western Mining
The main advantage of trading using opposite Wuhan Yangtze and Western Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze 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.| Wuhan Yangtze vs. Industrial and Commercial | Wuhan Yangtze vs. Kweichow Moutai Co | Wuhan Yangtze vs. Agricultural Bank of | Wuhan Yangtze vs. China Mobile Limited |
| Western Mining vs. Cultural Investment Holdings | Western Mining vs. JCHX Mining Management | Western Mining vs. Zoje Resources Investment | Western Mining vs. Zhejiang Construction Investment |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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