Correlation Between Bank of Suzhou and Hainan Mining
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By analyzing existing cross correlation between Bank of Suzhou and Hainan Mining Co, you can compare the effects of market volatilities on Bank of Suzhou 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 Bank of Suzhou with a short position of Hainan Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Suzhou and Hainan Mining.
Diversification Opportunities for Bank of Suzhou and Hainan Mining
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Hainan is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Suzhou and Hainan Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Mining and Bank of Suzhou 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 Bank of Suzhou 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 Bank of Suzhou i.e., Bank of Suzhou and Hainan Mining go up and down completely randomly.
Pair Corralation between Bank of Suzhou and Hainan Mining
Assuming the 90 days trading horizon Bank of Suzhou is expected to under-perform the Hainan Mining. But the stock apears to be less risky and, when comparing its historical volatility, Bank of Suzhou is 1.06 times less risky than Hainan Mining. The stock trades about -0.16 of its potential returns per unit of risk. The Hainan Mining Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 675.00 in Hainan Mining Co on November 8, 2024 and sell it today you would earn a total of 3.00 from holding Hainan Mining Co or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Suzhou vs. Hainan Mining Co
Performance |
| Timeline |
| Bank of Suzhou |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Hainan Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of Suzhou and Hainan Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Suzhou and Hainan Mining
The main advantage of trading using opposite Bank of Suzhou and Hainan Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Suzhou 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.The idea behind Bank of Suzhou and Hainan Mining Co 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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