Correlation Between Western Mining and Heilongjiang Transport
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By analyzing existing cross correlation between Western Mining Co and Heilongjiang Transport Development, you can compare the effects of market volatilities on Western Mining and Heilongjiang Transport 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 Heilongjiang Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Mining and Heilongjiang Transport.
Diversification Opportunities for Western Mining and Heilongjiang Transport
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and Heilongjiang is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Western Mining Co and Heilongjiang Transport Develop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heilongjiang Transport 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 Heilongjiang Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heilongjiang Transport has no effect on the direction of Western Mining i.e., Western Mining and Heilongjiang Transport go up and down completely randomly.
Pair Corralation between Western Mining and Heilongjiang Transport
Assuming the 90 days trading horizon Western Mining Co is expected to generate 0.77 times more return on investment than Heilongjiang Transport. However, Western Mining Co is 1.3 times less risky than Heilongjiang Transport. It trades about 0.05 of its potential returns per unit of risk. Heilongjiang Transport Development is currently generating about 0.01 per unit of risk. If you would invest 1,304 in Western Mining Co on August 29, 2024 and sell it today you would earn a total of 364.00 from holding Western Mining Co or generate 27.91% 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. Heilongjiang Transport Develop
Performance |
| Timeline |
| Western Mining |
| Heilongjiang Transport |
Western Mining and Heilongjiang Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Mining and Heilongjiang Transport
The main advantage of trading using opposite Western Mining and Heilongjiang Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Mining position performs unexpectedly, Heilongjiang Transport 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 Heilongjiang Transport will offset losses from the drop in Heilongjiang Transport's long position.| Western Mining vs. Wanhua Chemical Group | Western Mining vs. Baoshan Iron Steel | Western Mining vs. Shandong Gold Mining | Western Mining vs. Rongsheng Petrochemical Co |
| Heilongjiang Transport vs. PetroChina Co Ltd | Heilongjiang Transport vs. China State Construction | Heilongjiang Transport vs. China Mobile Limited | Heilongjiang Transport vs. Industrial and Commercial |
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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