Correlation Between Dazhong Transportation and Western Mining
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By analyzing existing cross correlation between Dazhong Transportation Group and Western Mining Co, you can compare the effects of market volatilities on Dazhong Transportation 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 Dazhong Transportation with a short position of Western Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dazhong Transportation and Western Mining.
Diversification Opportunities for Dazhong Transportation and Western Mining
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dazhong and Western is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Dazhong Transportation Group and Western Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Mining and Dazhong Transportation 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 Dazhong Transportation Group 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 Dazhong Transportation i.e., Dazhong Transportation and Western Mining go up and down completely randomly.
Pair Corralation between Dazhong Transportation and Western Mining
Assuming the 90 days trading horizon Dazhong Transportation Group is expected to generate 1.18 times more return on investment than Western Mining. However, Dazhong Transportation is 1.18 times more volatile than Western Mining Co. It trades about 0.24 of its potential returns per unit of risk. Western Mining Co is currently generating about 0.14 per unit of risk. If you would invest 18.00 in Dazhong Transportation Group on September 12, 2024 and sell it today you would earn a total of 8.00 from holding Dazhong Transportation Group or generate 44.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.28% |
| Values | Daily Returns |
Dazhong Transportation Group vs. Western Mining Co
Performance |
| Timeline |
| Dazhong Transportation |
| Western Mining |
Dazhong Transportation and Western Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dazhong Transportation and Western Mining
The main advantage of trading using opposite Dazhong Transportation and Western Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dazhong Transportation 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.| Dazhong Transportation vs. Ming Yang Smart | Dazhong Transportation vs. 159681 | Dazhong Transportation vs. 159005 | Dazhong Transportation vs. Loctek Ergonomic Technology |
| Western Mining vs. Zijin Mining Group | Western Mining vs. Wanhua Chemical Group | Western Mining vs. Baoshan Iron Steel | Western Mining 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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