Correlation Between Western Mining and Pengxin International
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By analyzing existing cross correlation between Western Mining Co and Pengxin International Mining, you can compare the effects of market volatilities on Western Mining and Pengxin International 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 Pengxin International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Mining and Pengxin International.
Diversification Opportunities for Western Mining and Pengxin International
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and Pengxin is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Western Mining Co and Pengxin International Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pengxin International 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 Pengxin International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pengxin International has no effect on the direction of Western Mining i.e., Western Mining and Pengxin International go up and down completely randomly.
Pair Corralation between Western Mining and Pengxin International
Assuming the 90 days trading horizon Western Mining Co is expected to under-perform the Pengxin International. But the stock apears to be less risky and, when comparing its historical volatility, Western Mining Co is 1.87 times less risky than Pengxin International. The stock trades about -0.25 of its potential returns per unit of risk. The Pengxin International Mining is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 328.00 in Pengxin International Mining on September 3, 2024 and sell it today you would lose (12.00) from holding Pengxin International Mining or give up 3.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Mining Co vs. Pengxin International Mining
Performance |
| Timeline |
| Western Mining |
| Pengxin International |
Western Mining and Pengxin International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Mining and Pengxin International
The main advantage of trading using opposite Western Mining and Pengxin International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Mining position performs unexpectedly, Pengxin International 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 Pengxin International will offset losses from the drop in Pengxin International's long position.| Western Mining vs. Zijin Mining Group | Western Mining vs. Baoshan Iron Steel | Western Mining vs. Rongsheng Petrochemical Co | Western Mining vs. Hoshine Silicon Ind |
| Pengxin International vs. Zijin Mining Group | Pengxin International vs. Baoshan Iron Steel | Pengxin International vs. Rongsheng Petrochemical Co | Pengxin International vs. Hoshine Silicon Ind |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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