Correlation Between Western Mining and Lonkey Industrial
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By analyzing existing cross correlation between Western Mining Co and Lonkey Industrial Co, you can compare the effects of market volatilities on Western Mining and Lonkey Industrial 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 Mining with a short position of Lonkey Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Mining and Lonkey Industrial.
Diversification Opportunities for Western Mining and Lonkey Industrial
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and Lonkey is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Western Mining Co and Lonkey Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lonkey Industrial and Western Mining 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 Mining Co are associated (or correlated) with Lonkey Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lonkey Industrial has no effect on the direction of Western Mining i.e., Western Mining and Lonkey Industrial go up and down completely randomly.
Pair Corralation between Western Mining and Lonkey Industrial
Assuming the 90 days trading horizon Western Mining Co is expected to under-perform the Lonkey Industrial. In addition to that, Western Mining is 1.0 times more volatile than Lonkey Industrial Co. It trades about -0.01 of its total potential returns per unit of risk. Lonkey Industrial Co is currently generating about 0.05 per unit of volatility. If you would invest 295.00 in Lonkey Industrial Co on September 3, 2024 and sell it today you would earn a total of 35.00 from holding Lonkey Industrial Co or generate 11.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Mining Co vs. Lonkey Industrial Co
Performance |
| Timeline |
| Western Mining |
| Lonkey Industrial |
Western Mining and Lonkey Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Mining and Lonkey Industrial
The main advantage of trading using opposite Western Mining and Lonkey Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Mining position performs unexpectedly, Lonkey Industrial 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 Lonkey Industrial will offset losses from the drop in Lonkey Industrial's long position.| Western Mining vs. Zijin Mining Group | Western Mining vs. Baoshan Iron Steel | Western Mining vs. Hoshine Silicon Ind |
| Lonkey Industrial vs. Chengdu Spaceon Electronics | Lonkey Industrial vs. Sinosteel Luonai Materials | Lonkey Industrial vs. JCHX Mining Management | Lonkey Industrial vs. King Strong New Material |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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