Correlation Between Qingdao Haier and Western Mining
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By analyzing existing cross correlation between Qingdao Haier Biomedical and Western Mining Co, you can compare the effects of market volatilities on Qingdao Haier and Western Mining 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 Qingdao Haier with a short position of Western Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingdao Haier and Western Mining.
Diversification Opportunities for Qingdao Haier and Western Mining
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Qingdao and Western is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Qingdao Haier Biomedical and Western Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Mining and Qingdao Haier 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 Qingdao Haier Biomedical are associated (or correlated) with Western Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Mining has no effect on the direction of Qingdao Haier i.e., Qingdao Haier and Western Mining go up and down completely randomly.
Pair Corralation between Qingdao Haier and Western Mining
Assuming the 90 days trading horizon Qingdao Haier Biomedical is expected to under-perform the Western Mining. In addition to that, Qingdao Haier is 2.32 times more volatile than Western Mining Co. It trades about -0.17 of its total potential returns per unit of risk. Western Mining Co is currently generating about 0.27 per unit of volatility. If you would invest 1,644 in Western Mining Co on November 7, 2024 and sell it today you would earn a total of 99.00 from holding Western Mining Co or generate 6.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qingdao Haier Biomedical vs. Western Mining Co
Performance |
| Timeline |
| Qingdao Haier Biomedical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Western Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Qingdao Haier and Western Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qingdao Haier and Western Mining
The main advantage of trading using opposite Qingdao Haier and Western Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qingdao Haier position performs unexpectedly, Western Mining 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 Mining will offset losses from the drop in Western Mining's long position.The idea behind Qingdao Haier Biomedical and Western Mining Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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