Correlation Between Jiangnan Mould and Huaibei Mining
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By analyzing existing cross correlation between Jiangnan Mould Plastic and Huaibei Mining Holdings, you can compare the effects of market volatilities on Jiangnan Mould and Huaibei 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 Jiangnan Mould with a short position of Huaibei Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangnan Mould and Huaibei Mining.
Diversification Opportunities for Jiangnan Mould and Huaibei Mining
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiangnan and Huaibei is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Jiangnan Mould Plastic and Huaibei Mining Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huaibei Mining Holdings and Jiangnan Mould 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 Jiangnan Mould Plastic are associated (or correlated) with Huaibei Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huaibei Mining Holdings has no effect on the direction of Jiangnan Mould i.e., Jiangnan Mould and Huaibei Mining go up and down completely randomly.
Pair Corralation between Jiangnan Mould and Huaibei Mining
Assuming the 90 days trading horizon Jiangnan Mould Plastic is expected to generate 1.22 times more return on investment than Huaibei Mining. However, Jiangnan Mould is 1.22 times more volatile than Huaibei Mining Holdings. It trades about 0.06 of its potential returns per unit of risk. Huaibei Mining Holdings is currently generating about -0.04 per unit of risk. If you would invest 518.00 in Jiangnan Mould Plastic on November 7, 2024 and sell it today you would earn a total of 173.00 from holding Jiangnan Mould Plastic or generate 33.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Jiangnan Mould Plastic vs. Huaibei Mining Holdings
Performance |
Timeline |
Jiangnan Mould Plastic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Huaibei Mining Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Jiangnan Mould and Huaibei Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jiangnan Mould and Huaibei Mining
The main advantage of trading using opposite Jiangnan Mould and Huaibei Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangnan Mould position performs unexpectedly, Huaibei 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 Huaibei Mining will offset losses from the drop in Huaibei Mining's long position.The idea behind Jiangnan Mould Plastic and Huaibei Mining Holdings 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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