Correlation Between Xiamen ITG and Western Mining

Can any of the company-specific risk be diversified away by investing in both Xiamen ITG and Western Mining at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Xiamen ITG and Western Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Xiamen ITG Group and Western Mining Co, you can compare the effects of market volatilities on Xiamen ITG 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 Xiamen ITG with a short position of Western Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen ITG and Western Mining.

Diversification Opportunities for Xiamen ITG and Western Mining

0.0

Correlation Coefficient

Xiamen ITG  Western Mining

Pay attention - limited upside

The 3 months correlation between Xiamen and Western is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen ITG 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 Xiamen ITG 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 Xiamen ITG 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 Xiamen ITG i.e., Xiamen ITG and Western Mining go up and down completely randomly.

Pair Corralation between Xiamen ITG and Western Mining

If you would invest  0.00  in Xiamen ITG Group on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Xiamen ITG Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Xiamen ITG Group  vs.  Western Mining Co

Xiamen ITG Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xiamen ITG Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Xiamen ITG is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Western Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Mining Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Western Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Xiamen ITG and Western Mining

The main advantage of trading using opposite Xiamen ITG and Western Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen ITG 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 Xiamen ITG Group 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.