Correlation Between Penyao Environmental and Hainan Mining
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By analyzing existing cross correlation between Penyao Environmental Protection and Hainan Mining Co, you can compare the effects of market volatilities on Penyao Environmental 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 Penyao Environmental with a short position of Hainan Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penyao Environmental and Hainan Mining.
Diversification Opportunities for Penyao Environmental and Hainan Mining
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Penyao and Hainan is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Penyao Environmental Protectio and Hainan Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Mining and Penyao Environmental 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 Penyao Environmental Protection 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 Penyao Environmental i.e., Penyao Environmental and Hainan Mining go up and down completely randomly.
Pair Corralation between Penyao Environmental and Hainan Mining
Assuming the 90 days trading horizon Penyao Environmental Protection is expected to generate 1.0 times more return on investment than Hainan Mining. However, Penyao Environmental is 1.0 times more volatile than Hainan Mining Co. It trades about 0.01 of its potential returns per unit of risk. Hainan Mining Co is currently generating about 0.0 per unit of risk. If you would invest 502.00 in Penyao Environmental Protection on October 21, 2024 and sell it today you would earn a total of 11.00 from holding Penyao Environmental Protection or generate 2.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penyao Environmental Protectio vs. Hainan Mining Co
Performance |
| Timeline |
| Penyao Environmental |
| Hainan Mining |
Penyao Environmental and Hainan Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penyao Environmental and Hainan Mining
The main advantage of trading using opposite Penyao Environmental and Hainan Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penyao Environmental 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 Penyao Environmental Protection 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.
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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