Correlation Between Inner Mongolia and North Huajin
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By analyzing existing cross correlation between Inner Mongolia BaoTou and North Huajin Chemical, you can compare the effects of market volatilities on Inner Mongolia and North Huajin 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 Inner Mongolia with a short position of North Huajin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inner Mongolia and North Huajin.
Diversification Opportunities for Inner Mongolia and North Huajin
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Inner and North is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Inner Mongolia BaoTou and North Huajin Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Huajin Chemical and Inner Mongolia 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 Inner Mongolia BaoTou are associated (or correlated) with North Huajin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Huajin Chemical has no effect on the direction of Inner Mongolia i.e., Inner Mongolia and North Huajin go up and down completely randomly.
Pair Corralation between Inner Mongolia and North Huajin
Assuming the 90 days trading horizon Inner Mongolia BaoTou is expected to generate 0.99 times more return on investment than North Huajin. However, Inner Mongolia BaoTou is 1.01 times less risky than North Huajin. It trades about 0.16 of its potential returns per unit of risk. North Huajin Chemical is currently generating about 0.13 per unit of risk. If you would invest 157.00 in Inner Mongolia BaoTou on August 28, 2024 and sell it today you would earn a total of 39.00 from holding Inner Mongolia BaoTou or generate 24.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inner Mongolia BaoTou vs. North Huajin Chemical
Performance |
| Timeline |
| Inner Mongolia BaoTou |
| North Huajin Chemical |
Inner Mongolia and North Huajin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inner Mongolia and North Huajin
The main advantage of trading using opposite Inner Mongolia and North Huajin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inner Mongolia position performs unexpectedly, North Huajin 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 Huajin will offset losses from the drop in North Huajin's long position.| Inner Mongolia vs. Xiangyang Automobile Bearing | Inner Mongolia vs. Heren Health Co | Inner Mongolia vs. Sinomach Automobile Co | Inner Mongolia vs. Anhui Jianghuai Automobile |
| North Huajin vs. Zijin Mining Group | North Huajin vs. Wanhua Chemical Group | North Huajin vs. Baoshan Iron Steel | North Huajin vs. Shandong Gold Mining |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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