Correlation Between Western Mining and CIMC Vehicles
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By analyzing existing cross correlation between Western Mining Co and CIMC Vehicles Co, you can compare the effects of market volatilities on Western Mining and CIMC Vehicles 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 Western Mining with a short position of CIMC Vehicles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Mining and CIMC Vehicles.
Diversification Opportunities for Western Mining and CIMC Vehicles
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and CIMC is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Western Mining Co and CIMC Vehicles Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIMC Vehicles and Western Mining 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 Western Mining Co are associated (or correlated) with CIMC Vehicles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIMC Vehicles has no effect on the direction of Western Mining i.e., Western Mining and CIMC Vehicles go up and down completely randomly.
Pair Corralation between Western Mining and CIMC Vehicles
Assuming the 90 days trading horizon Western Mining Co is expected to generate 1.02 times more return on investment than CIMC Vehicles. However, Western Mining is 1.02 times more volatile than CIMC Vehicles Co. It trades about -0.08 of its potential returns per unit of risk. CIMC Vehicles Co is currently generating about -0.08 per unit of risk. If you would invest 1,679 in Western Mining Co on September 26, 2024 and sell it today you would lose (45.00) from holding Western Mining Co or give up 2.68% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Western Mining Co vs. CIMC Vehicles Co
Performance |
Timeline |
Western Mining |
CIMC Vehicles |
Western Mining and CIMC Vehicles Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Western Mining and CIMC Vehicles
The main advantage of trading using opposite Western Mining and CIMC Vehicles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Mining position performs unexpectedly, CIMC Vehicles 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 CIMC Vehicles will offset losses from the drop in CIMC Vehicles' long position.Western Mining vs. Zijin Mining Group | Western Mining vs. Wanhua Chemical Group | Western Mining vs. Baoshan Iron Steel | Western Mining vs. Shandong Gold Mining |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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