Correlation Between Western Mining and Beijing Kingsoft
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By analyzing existing cross correlation between Western Mining Co and Beijing Kingsoft Office, you can compare the effects of market volatilities on Western Mining and Beijing Kingsoft 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 Beijing Kingsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Mining and Beijing Kingsoft.
Diversification Opportunities for Western Mining and Beijing Kingsoft
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and Beijing is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Western Mining Co and Beijing Kingsoft Office in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Kingsoft Office 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 Beijing Kingsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Kingsoft Office has no effect on the direction of Western Mining i.e., Western Mining and Beijing Kingsoft go up and down completely randomly.
Pair Corralation between Western Mining and Beijing Kingsoft
Assuming the 90 days trading horizon Western Mining Co is expected to under-perform the Beijing Kingsoft. But the stock apears to be less risky and, when comparing its historical volatility, Western Mining Co is 2.74 times less risky than Beijing Kingsoft. The stock trades about -0.25 of its potential returns per unit of risk. The Beijing Kingsoft Office is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 25,249 in Beijing Kingsoft Office on September 3, 2024 and sell it today you would earn a total of 4,225 from holding Beijing Kingsoft Office or generate 16.73% 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. Beijing Kingsoft Office
Performance |
| Timeline |
| Western Mining |
| Beijing Kingsoft Office |
Western Mining and Beijing Kingsoft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Mining and Beijing Kingsoft
The main advantage of trading using opposite Western Mining and Beijing Kingsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Mining position performs unexpectedly, Beijing Kingsoft 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 Beijing Kingsoft will offset losses from the drop in Beijing Kingsoft's long position.| Western Mining vs. Zijin Mining Group | Western Mining vs. Baoshan Iron Steel | Western Mining vs. Hoshine Silicon Ind |
| Beijing Kingsoft vs. Western Mining Co | Beijing Kingsoft vs. JCHX Mining Management | Beijing Kingsoft vs. Guangdong Silvere Sci | Beijing Kingsoft vs. Innovative Medical Management |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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