Correlation Between Western Mining and China Railway
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By analyzing existing cross correlation between Western Mining Co and China Railway Group, you can compare the effects of market volatilities on Western Mining and China Railway 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 Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Mining and China Railway.
Diversification Opportunities for Western Mining and China Railway
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Western and China is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Western Mining Co and China Railway Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Group 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 Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Group has no effect on the direction of Western Mining i.e., Western Mining and China Railway go up and down completely randomly.
Pair Corralation between Western Mining and China Railway
Assuming the 90 days trading horizon Western Mining Co is expected to generate 0.93 times more return on investment than China Railway. However, Western Mining Co is 1.08 times less risky than China Railway. It trades about -0.09 of its potential returns per unit of risk. China Railway Group is currently generating about -0.13 per unit of risk. If you would invest 1,897 in Western Mining Co on November 6, 2024 and sell it today you would lose (154.00) from holding Western Mining Co or give up 8.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Mining Co vs. China Railway Group
Performance |
| Timeline |
| Western Mining |
| China Railway Group |
Western Mining and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Mining and China Railway
The main advantage of trading using opposite Western Mining and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Mining position performs unexpectedly, China Railway 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 Railway will offset losses from the drop in China Railway's long position.| Western Mining vs. Semiconductor Manufacturing Intl | Western Mining vs. COL Digital Publishing | Western Mining vs. Jiangsu Phoenix Publishing | Western Mining vs. GRINM Semiconductor Materials |
| China Railway vs. Jiangsu Jinling Sports | China Railway vs. Beijing Kaiwen Education | China Railway vs. Caihong Display Devices | China Railway vs. Jiangsu Phoenix Publishing |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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