Correlation Between Suzhou Weizhixiang and Western Metal
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By analyzing existing cross correlation between Suzhou Weizhixiang Food and Western Metal Materials, you can compare the effects of market volatilities on Suzhou Weizhixiang 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 Suzhou Weizhixiang with a short position of Western Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suzhou Weizhixiang and Western Metal.
Diversification Opportunities for Suzhou Weizhixiang and Western Metal
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Suzhou and Western is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Suzhou Weizhixiang Food 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 Suzhou Weizhixiang 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 Suzhou Weizhixiang Food 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 Suzhou Weizhixiang i.e., Suzhou Weizhixiang and Western Metal go up and down completely randomly.
Pair Corralation between Suzhou Weizhixiang and Western Metal
Assuming the 90 days trading horizon Suzhou Weizhixiang Food is expected to generate 1.15 times more return on investment than Western Metal. However, Suzhou Weizhixiang is 1.15 times more volatile than Western Metal Materials. It trades about 0.07 of its potential returns per unit of risk. Western Metal Materials is currently generating about 0.03 per unit of risk. If you would invest 2,335 in Suzhou Weizhixiang Food on September 12, 2024 and sell it today you would earn a total of 516.00 from holding Suzhou Weizhixiang Food or generate 22.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suzhou Weizhixiang Food vs. Western Metal Materials
Performance |
| Timeline |
| Suzhou Weizhixiang Food |
| Western Metal Materials |
Suzhou Weizhixiang and Western Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suzhou Weizhixiang and Western Metal
The main advantage of trading using opposite Suzhou Weizhixiang and Western Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suzhou Weizhixiang 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.| Suzhou Weizhixiang vs. China Petroleum Chemical | Suzhou Weizhixiang vs. PetroChina Co Ltd | Suzhou Weizhixiang vs. China State Construction | Suzhou Weizhixiang vs. China Railway Group |
| Western Metal vs. Zijin Mining Group | Western Metal vs. Wanhua Chemical Group | Western Metal vs. Baoshan Iron Steel | Western Metal vs. Rongsheng Petrochemical Co |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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