Correlation Between Western Mining and Xinjiang Tianrun
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By analyzing existing cross correlation between Western Mining Co and Xinjiang Tianrun Dairy, you can compare the effects of market volatilities on Western Mining and Xinjiang Tianrun 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 Xinjiang Tianrun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Mining and Xinjiang Tianrun.
Diversification Opportunities for Western Mining and Xinjiang Tianrun
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Xinjiang is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Western Mining Co and Xinjiang Tianrun Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Tianrun Dairy 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 Xinjiang Tianrun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Tianrun Dairy has no effect on the direction of Western Mining i.e., Western Mining and Xinjiang Tianrun go up and down completely randomly.
Pair Corralation between Western Mining and Xinjiang Tianrun
Assuming the 90 days trading horizon Western Mining Co is expected to generate 1.11 times more return on investment than Xinjiang Tianrun. However, Western Mining is 1.11 times more volatile than Xinjiang Tianrun Dairy. It trades about 0.06 of its potential returns per unit of risk. Xinjiang Tianrun Dairy is currently generating about -0.04 per unit of risk. If you would invest 1,178 in Western Mining Co on September 12, 2024 and sell it today you would earn a total of 498.00 from holding Western Mining Co or generate 42.28% 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. Xinjiang Tianrun Dairy
Performance |
| Timeline |
| Western Mining |
| Xinjiang Tianrun Dairy |
Western Mining and Xinjiang Tianrun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Mining and Xinjiang Tianrun
The main advantage of trading using opposite Western Mining and Xinjiang Tianrun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Mining position performs unexpectedly, Xinjiang Tianrun 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 Xinjiang Tianrun will offset losses from the drop in Xinjiang Tianrun'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 |
| Xinjiang Tianrun vs. China Petroleum Chemical | Xinjiang Tianrun vs. PetroChina Co Ltd | Xinjiang Tianrun vs. China State Construction | Xinjiang Tianrun vs. China Railway Group |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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