Correlation Between Linzhou Heavy and Hainan Mining
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By analyzing existing cross correlation between Linzhou Heavy Machinery and Hainan Mining Co, you can compare the effects of market volatilities on Linzhou Heavy 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 Linzhou Heavy with a short position of Hainan Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linzhou Heavy and Hainan Mining.
Diversification Opportunities for Linzhou Heavy and Hainan Mining
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Linzhou and Hainan is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Linzhou Heavy Machinery and Hainan Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Mining and Linzhou Heavy 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 Linzhou Heavy Machinery 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 Linzhou Heavy i.e., Linzhou Heavy and Hainan Mining go up and down completely randomly.
Pair Corralation between Linzhou Heavy and Hainan Mining
Assuming the 90 days trading horizon Linzhou Heavy Machinery is expected to generate 1.15 times more return on investment than Hainan Mining. However, Linzhou Heavy is 1.15 times more volatile than Hainan Mining Co. It trades about 0.0 of its potential returns per unit of risk. Hainan Mining Co is currently generating about -0.15 per unit of risk. If you would invest 392.00 in Linzhou Heavy Machinery on October 29, 2024 and sell it today you would lose (2.00) from holding Linzhou Heavy Machinery or give up 0.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Linzhou Heavy Machinery vs. Hainan Mining Co
Performance |
| Timeline |
| Linzhou Heavy Machinery |
| Hainan Mining |
Linzhou Heavy and Hainan Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Linzhou Heavy and Hainan Mining
The main advantage of trading using opposite Linzhou Heavy and Hainan Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linzhou Heavy 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.| Linzhou Heavy vs. PetroChina Co Ltd | Linzhou Heavy vs. Industrial and Commercial | Linzhou Heavy vs. China Petroleum Chemical | Linzhou Heavy vs. China Construction Bank |
| Hainan Mining vs. PKU HealthCare Corp | Hainan Mining vs. Chongqing Changan Automobile | Hainan Mining vs. Heren Health Co | Hainan Mining vs. Dongfeng Automobile Co |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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