Correlation Between Kunshan Guoli and Western Metal
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By analyzing existing cross correlation between Kunshan Guoli Electronic and Western Metal Materials, you can compare the effects of market volatilities on Kunshan Guoli 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 Kunshan Guoli with a short position of Western Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kunshan Guoli and Western Metal.
Diversification Opportunities for Kunshan Guoli and Western Metal
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kunshan and Western is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Kunshan Guoli Electronic 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 Kunshan Guoli 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 Kunshan Guoli Electronic 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 Kunshan Guoli i.e., Kunshan Guoli and Western Metal go up and down completely randomly.
Pair Corralation between Kunshan Guoli and Western Metal
Assuming the 90 days trading horizon Kunshan Guoli Electronic is expected to generate 1.33 times more return on investment than Western Metal. However, Kunshan Guoli is 1.33 times more volatile than Western Metal Materials. It trades about 0.04 of its potential returns per unit of risk. Western Metal Materials is currently generating about 0.02 per unit of risk. If you would invest 4,200 in Kunshan Guoli Electronic on September 2, 2024 and sell it today you would earn a total of 60.00 from holding Kunshan Guoli Electronic or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kunshan Guoli Electronic vs. Western Metal Materials
Performance |
| Timeline |
| Kunshan Guoli Electronic |
| Western Metal Materials |
Kunshan Guoli and Western Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kunshan Guoli and Western Metal
The main advantage of trading using opposite Kunshan Guoli and Western Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kunshan Guoli 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.| Kunshan Guoli vs. HaiXin Foods Co | Kunshan Guoli vs. Guangdong Brandmax Marketing | Kunshan Guoli vs. Youyou Foods Co | Kunshan Guoli vs. Gan Yuan Foods |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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