Correlation Between Western Mining and Chongqing Brewery
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By analyzing existing cross correlation between Western Mining Co and Chongqing Brewery Co, you can compare the effects of market volatilities on Western Mining and Chongqing Brewery 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 Chongqing Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Mining and Chongqing Brewery.
Diversification Opportunities for Western Mining and Chongqing Brewery
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Chongqing is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Western Mining Co and Chongqing Brewery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Brewery 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 Chongqing Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Brewery has no effect on the direction of Western Mining i.e., Western Mining and Chongqing Brewery go up and down completely randomly.
Pair Corralation between Western Mining and Chongqing Brewery
Assuming the 90 days trading horizon Western Mining Co is expected to generate 0.96 times more return on investment than Chongqing Brewery. However, Western Mining Co is 1.04 times less risky than Chongqing Brewery. It trades about 0.23 of its potential returns per unit of risk. Chongqing Brewery Co is currently generating about -0.51 per unit of risk. If you would invest 1,644 in Western Mining Co on October 29, 2024 and sell it today you would earn a total of 104.00 from holding Western Mining Co or generate 6.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Mining Co vs. Chongqing Brewery Co
Performance |
| Timeline |
| Western Mining |
| Chongqing Brewery |
Western Mining and Chongqing Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Mining and Chongqing Brewery
The main advantage of trading using opposite Western Mining and Chongqing Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Mining position performs unexpectedly, Chongqing Brewery 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 Chongqing Brewery will offset losses from the drop in Chongqing Brewery's long position.| Western Mining vs. Chison Medical Technologies | Western Mining vs. Hengkang Medical Group | Western Mining vs. Touchstone International Medical | Western Mining vs. Heilongjiang Publishing Media |
| Chongqing Brewery vs. Dongfeng Automobile Co | Chongqing Brewery vs. BrightGene Bio Medical | Chongqing Brewery vs. Nanjing Putian Telecommunications | Chongqing Brewery vs. Winner Medical 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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