Correlation Between Inner Mongolia and Hunan Valin
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By analyzing existing cross correlation between Inner Mongolia BaoTou and Hunan Valin Steel, you can compare the effects of market volatilities on Inner Mongolia and Hunan Valin 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 Hunan Valin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inner Mongolia and Hunan Valin.
Diversification Opportunities for Inner Mongolia and Hunan Valin
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Inner and Hunan is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Inner Mongolia BaoTou and Hunan Valin Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Valin Steel 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 Hunan Valin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Valin Steel has no effect on the direction of Inner Mongolia i.e., Inner Mongolia and Hunan Valin go up and down completely randomly.
Pair Corralation between Inner Mongolia and Hunan Valin
Assuming the 90 days trading horizon Inner Mongolia BaoTou is expected to generate 0.9 times more return on investment than Hunan Valin. However, Inner Mongolia BaoTou is 1.11 times less risky than Hunan Valin. It trades about 0.02 of its potential returns per unit of risk. Hunan Valin Steel is currently generating about 0.01 per unit of risk. If you would invest 181.00 in Inner Mongolia BaoTou on August 31, 2024 and sell it today you would earn a total of 12.00 from holding Inner Mongolia BaoTou or generate 6.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Inner Mongolia BaoTou vs. Hunan Valin Steel
Performance |
| Timeline |
| Inner Mongolia BaoTou |
| Hunan Valin Steel |
Inner Mongolia and Hunan Valin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inner Mongolia and Hunan Valin
The main advantage of trading using opposite Inner Mongolia and Hunan Valin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inner Mongolia position performs unexpectedly, Hunan Valin 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 Hunan Valin will offset losses from the drop in Hunan Valin's long position.| Inner Mongolia vs. Guilin Seamild Foods | Inner Mongolia vs. HaiXin Foods Co | Inner Mongolia vs. Great Sun Foods Co | Inner Mongolia vs. Beijing Sanyuan Foods |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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