Correlation Between Chongqing Sulian and Western Metal
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By analyzing existing cross correlation between Chongqing Sulian Plastic and Western Metal Materials, you can compare the effects of market volatilities on Chongqing Sulian 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 Chongqing Sulian with a short position of Western Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Sulian and Western Metal.
Diversification Opportunities for Chongqing Sulian and Western Metal
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chongqing and Western is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Sulian Plastic 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 Chongqing Sulian 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 Chongqing Sulian Plastic 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 Chongqing Sulian i.e., Chongqing Sulian and Western Metal go up and down completely randomly.
Pair Corralation between Chongqing Sulian and Western Metal
Assuming the 90 days trading horizon Chongqing Sulian Plastic is expected to under-perform the Western Metal. In addition to that, Chongqing Sulian is 1.11 times more volatile than Western Metal Materials. It trades about -0.04 of its total potential returns per unit of risk. Western Metal Materials is currently generating about 0.14 per unit of volatility. If you would invest 1,605 in Western Metal Materials on September 20, 2024 and sell it today you would earn a total of 130.00 from holding Western Metal Materials or generate 8.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Chongqing Sulian Plastic vs. Western Metal Materials
Performance |
Timeline |
Chongqing Sulian Plastic |
Western Metal Materials |
Chongqing Sulian and Western Metal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chongqing Sulian and Western Metal
The main advantage of trading using opposite Chongqing Sulian and Western Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Sulian 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.Chongqing Sulian vs. BeiGene | Chongqing Sulian vs. Kweichow Moutai Co | Chongqing Sulian vs. Beijing Roborock Technology | Chongqing Sulian vs. G bits Network Technology |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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