Correlation Between North Huajin and Inner Mongolia
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By analyzing existing cross correlation between North Huajin Chemical and Inner Mongolia Yuan, you can compare the effects of market volatilities on North Huajin and Inner Mongolia 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 North Huajin with a short position of Inner Mongolia. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Huajin and Inner Mongolia.
Diversification Opportunities for North Huajin and Inner Mongolia
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between North and Inner is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding North Huajin Chemical and Inner Mongolia Yuan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inner Mongolia Yuan and North Huajin 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 North Huajin Chemical are associated (or correlated) with Inner Mongolia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inner Mongolia Yuan has no effect on the direction of North Huajin i.e., North Huajin and Inner Mongolia go up and down completely randomly.
Pair Corralation between North Huajin and Inner Mongolia
Assuming the 90 days trading horizon North Huajin Chemical is expected to generate 1.62 times more return on investment than Inner Mongolia. However, North Huajin is 1.62 times more volatile than Inner Mongolia Yuan. It trades about 0.01 of its potential returns per unit of risk. Inner Mongolia Yuan is currently generating about -0.06 per unit of risk. If you would invest 530.00 in North Huajin Chemical on September 13, 2024 and sell it today you would lose (2.00) from holding North Huajin Chemical or give up 0.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
North Huajin Chemical vs. Inner Mongolia Yuan
Performance |
| Timeline |
| North Huajin Chemical |
| Inner Mongolia Yuan |
North Huajin and Inner Mongolia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North Huajin and Inner Mongolia
The main advantage of trading using opposite North Huajin and Inner Mongolia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Huajin position performs unexpectedly, Inner Mongolia 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 Inner Mongolia will offset losses from the drop in Inner Mongolia's long position.| North Huajin vs. Zijin Mining Group | North Huajin vs. Wanhua Chemical Group | North Huajin vs. Baoshan Iron Steel | North Huajin vs. Shandong Gold Mining |
| Inner Mongolia vs. Zijin Mining Group | Inner Mongolia vs. Wanhua Chemical Group | Inner Mongolia vs. Baoshan Iron Steel | Inner Mongolia 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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