Correlation Between Wuhan Yangtze and Hainan Mining
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By analyzing existing cross correlation between Wuhan Yangtze Communication and Hainan Mining Co, you can compare the effects of market volatilities on Wuhan Yangtze 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 Wuhan Yangtze with a short position of Hainan Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and Hainan Mining.
Diversification Opportunities for Wuhan Yangtze and Hainan Mining
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wuhan and Hainan is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and Hainan Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Mining and Wuhan Yangtze 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 Wuhan Yangtze Communication 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 Wuhan Yangtze i.e., Wuhan Yangtze and Hainan Mining go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and Hainan Mining
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to generate 3.03 times more return on investment than Hainan Mining. However, Wuhan Yangtze is 3.03 times more volatile than Hainan Mining Co. It trades about 0.23 of its potential returns per unit of risk. Hainan Mining Co is currently generating about -0.08 per unit of risk. If you would invest 1,963 in Wuhan Yangtze Communication on August 29, 2024 and sell it today you would earn a total of 622.00 from holding Wuhan Yangtze Communication or generate 31.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuhan Yangtze Communication vs. Hainan Mining Co
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| Hainan Mining |
Wuhan Yangtze and Hainan Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and Hainan Mining
The main advantage of trading using opposite Wuhan Yangtze and Hainan Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze 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.| Wuhan Yangtze vs. Yankershop Food Co | Wuhan Yangtze vs. Youyou Foods Co | Wuhan Yangtze vs. Great Sun Foods Co | Wuhan Yangtze vs. Harbin Air Conditioning |
| Hainan Mining vs. Wanhua Chemical Group | Hainan Mining vs. Shandong Gold Mining | Hainan Mining vs. Rongsheng Petrochemical Co | Hainan Mining vs. Inner Mongolia BaoTou |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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