Correlation Between Northern United and Western Metal
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By analyzing existing cross correlation between Northern United Publishing and Western Metal Materials, you can compare the effects of market volatilities on Northern United and Western Metal 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 Northern United with a short position of Western Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern United and Western Metal.
Diversification Opportunities for Northern United and Western Metal
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Northern and Western is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Northern United Publishing and Western Metal Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Metal Materials and Northern United 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 Northern United Publishing are associated (or correlated) with Western Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Metal Materials has no effect on the direction of Northern United i.e., Northern United and Western Metal go up and down completely randomly.
Pair Corralation between Northern United and Western Metal
Assuming the 90 days trading horizon Northern United Publishing is expected to under-perform the Western Metal. But the stock apears to be less risky and, when comparing its historical volatility, Northern United Publishing is 1.51 times less risky than Western Metal. The stock trades about -0.07 of its potential returns per unit of risk. The Western Metal Materials is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,800 in Western Metal Materials on October 28, 2024 and sell it today you would lose (36.00) from holding Western Metal Materials or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northern United Publishing vs. Western Metal Materials
Performance |
| Timeline |
| Northern United Publ |
| Western Metal Materials |
Northern United and Western Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern United and Western Metal
The main advantage of trading using opposite Northern United and Western Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern United position performs unexpectedly, Western Metal 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 Western Metal will offset losses from the drop in Western Metal's long position.| Northern United vs. Chengdu B ray Media | Northern United vs. Chinese Universe Publishing | Northern United vs. Jiangsu Phoenix Publishing | Northern United vs. COL Digital Publishing |
| Western Metal vs. Zijin Mining Group | Western Metal vs. Wanhua Chemical Group | Western Metal vs. Baoshan Iron Steel | Western Metal 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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