Correlation Between Western Mining and China Citic
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By analyzing existing cross correlation between Western Mining Co and China Citic Bank, you can compare the effects of market volatilities on Western Mining and China Citic 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 Citic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Mining and China Citic.
Diversification Opportunities for Western Mining and China Citic
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and China is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Western Mining Co and China Citic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Citic Bank 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 Citic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Citic Bank has no effect on the direction of Western Mining i.e., Western Mining and China Citic go up and down completely randomly.
Pair Corralation between Western Mining and China Citic
Assuming the 90 days trading horizon Western Mining Co is expected to under-perform the China Citic. In addition to that, Western Mining is 1.02 times more volatile than China Citic Bank. It trades about -0.17 of its total potential returns per unit of risk. China Citic Bank is currently generating about 0.1 per unit of volatility. If you would invest 662.00 in China Citic Bank on September 15, 2024 and sell it today you would earn a total of 21.00 from holding China Citic Bank or generate 3.17% 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. China Citic Bank
Performance |
| Timeline |
| Western Mining |
| China Citic Bank |
Western Mining and China Citic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Mining and China Citic
The main advantage of trading using opposite Western Mining and China Citic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Mining position performs unexpectedly, China Citic 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 Citic will offset losses from the drop in China Citic'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 |
| China Citic vs. Western Mining Co | China Citic vs. Shanghai Shuixing Home | China Citic vs. Zhengzhou Coal Mining | China Citic vs. Xinjiang Baodi 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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