Correlation Between North Huajin and Hainan Mining
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By analyzing existing cross correlation between North Huajin Chemical and Hainan Mining Co, you can compare the effects of market volatilities on North Huajin and Hainan 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 North Huajin with a short position of Hainan Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Huajin and Hainan Mining.
Diversification Opportunities for North Huajin and Hainan Mining
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between North and Hainan is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding North Huajin Chemical and Hainan Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Mining 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 Hainan Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Mining has no effect on the direction of North Huajin i.e., North Huajin and Hainan Mining go up and down completely randomly.
Pair Corralation between North Huajin and Hainan Mining
Assuming the 90 days trading horizon North Huajin Chemical is expected to generate 1.15 times more return on investment than Hainan Mining. However, North Huajin is 1.15 times more volatile than Hainan Mining Co. It trades about 0.05 of its potential returns per unit of risk. Hainan Mining Co is currently generating about 0.02 per unit of risk. If you would invest 463.00 in North Huajin Chemical on August 31, 2024 and sell it today you would earn a total of 62.00 from holding North Huajin Chemical or generate 13.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
North Huajin Chemical vs. Hainan Mining Co
Performance |
| Timeline |
| North Huajin Chemical |
| Hainan Mining |
North Huajin and Hainan Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North Huajin and Hainan Mining
The main advantage of trading using opposite North Huajin and Hainan Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Huajin position performs unexpectedly, Hainan 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 Hainan Mining will offset losses from the drop in Hainan Mining's long position.| North Huajin vs. Chengtun Mining Group | North Huajin vs. Suzhou Weizhixiang Food | North Huajin vs. Western Metal Materials | North Huajin vs. Minmetals Capital Co |
| Hainan Mining vs. Tianjin Hi Tech Development | Hainan Mining vs. Shandong Hongchuang Aluminum | Hainan Mining vs. Tianshan Aluminum Group | Hainan Mining vs. Beijing Yanjing Brewery |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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