Correlation Between Western Mining and Tianshan Aluminum
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By analyzing existing cross correlation between Western Mining Co and Tianshan Aluminum Group, you can compare the effects of market volatilities on Western Mining and Tianshan Aluminum 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 Tianshan Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Mining and Tianshan Aluminum.
Diversification Opportunities for Western Mining and Tianshan Aluminum
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Tianshan is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Western Mining Co and Tianshan Aluminum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianshan Aluminum 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 Tianshan Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianshan Aluminum has no effect on the direction of Western Mining i.e., Western Mining and Tianshan Aluminum go up and down completely randomly.
Pair Corralation between Western Mining and Tianshan Aluminum
Assuming the 90 days trading horizon Western Mining Co is expected to generate 0.82 times more return on investment than Tianshan Aluminum. However, Western Mining Co is 1.21 times less risky than Tianshan Aluminum. It trades about 0.18 of its potential returns per unit of risk. Tianshan Aluminum Group is currently generating about 0.04 per unit of risk. If you would invest 1,637 in Western Mining Co on October 16, 2024 and sell it today you would earn a total of 83.00 from holding Western Mining Co or generate 5.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Mining Co vs. Tianshan Aluminum Group
Performance |
| Timeline |
| Western Mining |
| Tianshan Aluminum |
Western Mining and Tianshan Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Mining and Tianshan Aluminum
The main advantage of trading using opposite Western Mining and Tianshan Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Mining position performs unexpectedly, Tianshan Aluminum 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 Tianshan Aluminum will offset losses from the drop in Tianshan Aluminum's long position.| Western Mining vs. Yindu Kitchen Equipment | Western Mining vs. Healthcare Co | Western Mining vs. PKU HealthCare Corp | Western Mining vs. Everjoy Health Group |
| Tianshan Aluminum vs. Sportsoul Co Ltd | Tianshan Aluminum vs. Huaibei Mining Holdings | Tianshan Aluminum vs. Western Mining Co | Tianshan Aluminum vs. Shenyang Blue Silver |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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