Correlation Between Western Mining and Chenzhou Jingui
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By analyzing existing cross correlation between Western Mining Co and Chenzhou Jingui Silver, you can compare the effects of market volatilities on Western Mining and Chenzhou Jingui 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 Chenzhou Jingui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Mining and Chenzhou Jingui.
Diversification Opportunities for Western Mining and Chenzhou Jingui
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Chenzhou is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Western Mining Co and Chenzhou Jingui Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chenzhou Jingui Silver 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 Chenzhou Jingui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chenzhou Jingui Silver has no effect on the direction of Western Mining i.e., Western Mining and Chenzhou Jingui go up and down completely randomly.
Pair Corralation between Western Mining and Chenzhou Jingui
Assuming the 90 days trading horizon Western Mining is expected to generate 1.03 times less return on investment than Chenzhou Jingui. But when comparing it to its historical volatility, Western Mining Co is 1.28 times less risky than Chenzhou Jingui. It trades about 0.06 of its potential returns per unit of risk. Chenzhou Jingui Silver is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 284.00 in Chenzhou Jingui Silver on September 12, 2024 and sell it today you would earn a total of 103.00 from holding Chenzhou Jingui Silver or generate 36.27% 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. Chenzhou Jingui Silver
Performance |
| Timeline |
| Western Mining |
| Chenzhou Jingui Silver |
Western Mining and Chenzhou Jingui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Mining and Chenzhou Jingui
The main advantage of trading using opposite Western Mining and Chenzhou Jingui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Mining position performs unexpectedly, Chenzhou Jingui 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 Chenzhou Jingui will offset losses from the drop in Chenzhou Jingui's long position.| Western Mining vs. Zijin Mining Group | Western Mining vs. Wanhua Chemical Group | Western Mining vs. Baoshan Iron Steel | Western Mining vs. Rongsheng Petrochemical Co |
| Chenzhou Jingui vs. Zijin Mining Group | Chenzhou Jingui vs. Wanhua Chemical Group | Chenzhou Jingui vs. Baoshan Iron Steel | Chenzhou Jingui vs. Rongsheng Petrochemical 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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