Correlation Between Western Mining and China Sports
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By analyzing existing cross correlation between Western Mining Co and China Sports Industry, you can compare the effects of market volatilities on Western Mining and China Sports 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 China Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Mining and China Sports.
Diversification Opportunities for Western Mining and China Sports
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and China is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Western Mining Co and China Sports Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Sports Industry 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 China Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Sports Industry has no effect on the direction of Western Mining i.e., Western Mining and China Sports go up and down completely randomly.
Pair Corralation between Western Mining and China Sports
Assuming the 90 days trading horizon Western Mining Co is expected to under-perform the China Sports. In addition to that, Western Mining is 1.05 times more volatile than China Sports Industry. It trades about -0.24 of its total potential returns per unit of risk. China Sports Industry is currently generating about 0.18 per unit of volatility. If you would invest 811.00 in China Sports Industry on September 4, 2024 and sell it today you would earn a total of 51.00 from holding China Sports Industry or generate 6.29% 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. China Sports Industry
Performance |
| Timeline |
| Western Mining |
| China Sports Industry |
Western Mining and China Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Mining and China Sports
The main advantage of trading using opposite Western Mining and China Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Mining position performs unexpectedly, China Sports 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 China Sports will offset losses from the drop in China Sports' long position.| Western Mining vs. China Sports Industry | Western Mining vs. Shuhua Sports Co | Western Mining vs. Jiajia Food Group | Western Mining vs. Dazhong Transportation Group |
| China Sports vs. Guangzhou Haige Communications | China Sports vs. Orinko Advanced Plastics | China Sports vs. Wuhan Yangtze Communication | China Sports vs. Zhongtong Guomai Communication |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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