Correlation Between Western Mining and Kuangda Technology
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By analyzing existing cross correlation between Western Mining Co and Kuangda Technology Group, you can compare the effects of market volatilities on Western Mining and Kuangda Technology 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 Kuangda Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Mining and Kuangda Technology.
Diversification Opportunities for Western Mining and Kuangda Technology
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Western and Kuangda is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Western Mining Co and Kuangda Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuangda Technology 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 Kuangda Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuangda Technology has no effect on the direction of Western Mining i.e., Western Mining and Kuangda Technology go up and down completely randomly.
Pair Corralation between Western Mining and Kuangda Technology
Assuming the 90 days trading horizon Western Mining Co is expected to generate 0.67 times more return on investment than Kuangda Technology. However, Western Mining Co is 1.5 times less risky than Kuangda Technology. It trades about 0.27 of its potential returns per unit of risk. Kuangda Technology Group is currently generating about 0.12 per unit of risk. If you would invest 1,644 in Western Mining Co on November 6, 2024 and sell it today you would earn a total of 99.00 from holding Western Mining Co or generate 6.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Mining Co vs. Kuangda Technology Group
Performance |
| Timeline |
| Western Mining |
| Kuangda Technology |
Western Mining and Kuangda Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Mining and Kuangda Technology
The main advantage of trading using opposite Western Mining and Kuangda Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Mining position performs unexpectedly, Kuangda Technology 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 Kuangda Technology will offset losses from the drop in Kuangda Technology's long position.| Western Mining vs. Semiconductor Manufacturing Intl | Western Mining vs. COL Digital Publishing | Western Mining vs. Jiangsu Phoenix Publishing | Western Mining vs. GRINM Semiconductor Materials |
| Kuangda Technology vs. GreenTech Environmental Co | Kuangda Technology vs. Elite Color Environmental | Kuangda Technology vs. Sinocat Environmental Technology | Kuangda Technology vs. MayAir Technology Co |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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