Correlation Between Western Mining and Xinjiang Baodi
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By analyzing existing cross correlation between Western Mining Co and Xinjiang Baodi Mining, you can compare the effects of market volatilities on Western Mining and Xinjiang Baodi 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 Baodi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Mining and Xinjiang Baodi.
Diversification Opportunities for Western Mining and Xinjiang Baodi
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Xinjiang is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Western Mining Co and Xinjiang Baodi Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Baodi Mining 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 Baodi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Baodi Mining has no effect on the direction of Western Mining i.e., Western Mining and Xinjiang Baodi go up and down completely randomly.
Pair Corralation between Western Mining and Xinjiang Baodi
Assuming the 90 days trading horizon Western Mining Co is expected to generate 0.8 times more return on investment than Xinjiang Baodi. However, Western Mining Co is 1.25 times less risky than Xinjiang Baodi. It trades about 0.06 of its potential returns per unit of risk. Xinjiang Baodi Mining is currently generating about 0.02 per unit of risk. If you would invest 1,002 in Western Mining Co on November 2, 2024 and sell it today you would earn a total of 741.00 from holding Western Mining Co or generate 73.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.03% |
| Values | Daily Returns |
Western Mining Co vs. Xinjiang Baodi Mining
Performance |
| Timeline |
| Western Mining |
| Xinjiang Baodi Mining |
Western Mining and Xinjiang Baodi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Mining and Xinjiang Baodi
The main advantage of trading using opposite Western Mining and Xinjiang Baodi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Mining position performs unexpectedly, Xinjiang Baodi 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 Baodi will offset losses from the drop in Xinjiang Baodi's long position.| Western Mining vs. Zijin Mining Group | Western Mining vs. Wanhua Chemical Group | Western Mining vs. Baoshan Iron Steel | Western Mining vs. Shandong Gold Mining |
| Xinjiang Baodi vs. Zijin Mining Group | Xinjiang Baodi vs. Wanhua Chemical Group | Xinjiang Baodi vs. Baoshan Iron Steel | Xinjiang Baodi vs. Shandong Gold Mining |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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