Correlation Between Xinjiang Baodi and Western Mining
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By analyzing existing cross correlation between Xinjiang Baodi Mining and Western Mining Co, you can compare the effects of market volatilities on Xinjiang Baodi 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 Xinjiang Baodi with a short position of Western Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Baodi and Western Mining.
Diversification Opportunities for Xinjiang Baodi and Western Mining
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xinjiang and Western is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Baodi Mining and Western Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Mining and Xinjiang Baodi 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 Xinjiang Baodi Mining 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 Xinjiang Baodi i.e., Xinjiang Baodi and Western Mining go up and down completely randomly.
Pair Corralation between Xinjiang Baodi and Western Mining
Assuming the 90 days trading horizon Xinjiang Baodi is expected to generate 3.13 times less return on investment than Western Mining. In addition to that, Xinjiang Baodi is 1.25 times more volatile than Western Mining Co. It trades about 0.02 of its total potential returns per unit of risk. Western Mining Co is currently generating about 0.06 per unit of volatility. If you would invest 1,002 in Western Mining Co on November 2, 2024 and sell it today you would earn a total of 741.00 from holding Western Mining Co or generate 73.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.03% |
| Values | Daily Returns |
Xinjiang Baodi Mining vs. Western Mining Co
Performance |
| Timeline |
| Xinjiang Baodi Mining |
| Western Mining |
Xinjiang Baodi and Western Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Baodi and Western Mining
The main advantage of trading using opposite Xinjiang Baodi and Western Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Baodi 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.| Xinjiang Baodi vs. Zijin Mining Group | Xinjiang Baodi vs. Wanhua Chemical Group | Xinjiang Baodi vs. Baoshan Iron Steel | Xinjiang Baodi vs. Shandong Gold Mining |
| Western Mining vs. Zijin Mining Group | Western Mining vs. Wanhua Chemical Group | Western Mining vs. Baoshan Iron Steel | Western Mining 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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