Correlation Between Western Mining and Rongsheng Petrochemical
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By analyzing existing cross correlation between Western Mining Co and Rongsheng Petrochemical Co, you can compare the effects of market volatilities on Western Mining and Rongsheng Petrochemical 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 Rongsheng Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Mining and Rongsheng Petrochemical.
Diversification Opportunities for Western Mining and Rongsheng Petrochemical
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and Rongsheng is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Western Mining Co and Rongsheng Petrochemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rongsheng Petrochemical 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 Rongsheng Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rongsheng Petrochemical has no effect on the direction of Western Mining i.e., Western Mining and Rongsheng Petrochemical go up and down completely randomly.
Pair Corralation between Western Mining and Rongsheng Petrochemical
Assuming the 90 days trading horizon Western Mining Co is expected to generate 1.1 times more return on investment than Rongsheng Petrochemical. However, Western Mining is 1.1 times more volatile than Rongsheng Petrochemical Co. It trades about 0.08 of its potential returns per unit of risk. Rongsheng Petrochemical Co is currently generating about 0.09 per unit of risk. If you would invest 1,525 in Western Mining Co on September 2, 2024 and sell it today you would earn a total of 159.00 from holding Western Mining Co or generate 10.43% 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. Rongsheng Petrochemical Co
Performance |
| Timeline |
| Western Mining |
| Rongsheng Petrochemical |
Western Mining and Rongsheng Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Mining and Rongsheng Petrochemical
The main advantage of trading using opposite Western Mining and Rongsheng Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Mining position performs unexpectedly, Rongsheng Petrochemical 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 Rongsheng Petrochemical will offset losses from the drop in Rongsheng Petrochemical's long position.| Western Mining vs. Cultural Investment Holdings | Western Mining vs. JCHX Mining Management | Western Mining vs. Zoje Resources Investment | Western Mining vs. Zhejiang Construction Investment |
| Rongsheng Petrochemical vs. Zijin Mining Group | Rongsheng Petrochemical vs. Wanhua Chemical Group | Rongsheng Petrochemical vs. Baoshan Iron Steel | Rongsheng Petrochemical 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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