Correlation Between Hunan Investment and North Copper
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By analyzing existing cross correlation between Hunan Investment Group and North Copper Shanxi, you can compare the effects of market volatilities on Hunan Investment and North Copper 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 Hunan Investment with a short position of North Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Investment and North Copper.
Diversification Opportunities for Hunan Investment and North Copper
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hunan and North is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Investment Group and North Copper Shanxi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Copper Shanxi and Hunan Investment 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 Hunan Investment Group are associated (or correlated) with North Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Copper Shanxi has no effect on the direction of Hunan Investment i.e., Hunan Investment and North Copper go up and down completely randomly.
Pair Corralation between Hunan Investment and North Copper
Assuming the 90 days trading horizon Hunan Investment Group is expected to generate 0.46 times more return on investment than North Copper. However, Hunan Investment Group is 2.17 times less risky than North Copper. It trades about 0.29 of its potential returns per unit of risk. North Copper Shanxi is currently generating about 0.07 per unit of risk. If you would invest 488.00 in Hunan Investment Group on November 7, 2024 and sell it today you would earn a total of 37.00 from holding Hunan Investment Group or generate 7.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunan Investment Group vs. North Copper Shanxi
Performance |
| Timeline |
| Hunan Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| North Copper Shanxi |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hunan Investment and North Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan Investment and North Copper
The main advantage of trading using opposite Hunan Investment and North Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Investment position performs unexpectedly, North Copper 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 North Copper will offset losses from the drop in North Copper's long position.The idea behind Hunan Investment Group and North Copper Shanxi 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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