Correlation Between Hainan HNA and Shanghai Construction
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By analyzing existing cross correlation between Hainan HNA Infrastructure and Shanghai Construction Group, you can compare the effects of market volatilities on Hainan HNA and Shanghai Construction 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 Hainan HNA with a short position of Shanghai Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan HNA and Shanghai Construction.
Diversification Opportunities for Hainan HNA and Shanghai Construction
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hainan and Shanghai is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Hainan HNA Infrastructure and Shanghai Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Construction and Hainan HNA 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 Hainan HNA Infrastructure are associated (or correlated) with Shanghai Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Construction has no effect on the direction of Hainan HNA i.e., Hainan HNA and Shanghai Construction go up and down completely randomly.
Pair Corralation between Hainan HNA and Shanghai Construction
Assuming the 90 days trading horizon Hainan HNA Infrastructure is expected to generate 1.58 times more return on investment than Shanghai Construction. However, Hainan HNA is 1.58 times more volatile than Shanghai Construction Group. It trades about 0.16 of its potential returns per unit of risk. Shanghai Construction Group is currently generating about -0.08 per unit of risk. If you would invest 349.00 in Hainan HNA Infrastructure on November 5, 2024 and sell it today you would earn a total of 16.00 from holding Hainan HNA Infrastructure or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan HNA Infrastructure vs. Shanghai Construction Group
Performance |
| Timeline |
| Hainan HNA Infrastructure |
| Shanghai Construction |
Hainan HNA and Shanghai Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan HNA and Shanghai Construction
The main advantage of trading using opposite Hainan HNA and Shanghai Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan HNA position performs unexpectedly, Shanghai Construction 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 Shanghai Construction will offset losses from the drop in Shanghai Construction's long position.| Hainan HNA vs. Beijing Seeyon Internet | Hainan HNA vs. Shengyuan Environmental Protection | Hainan HNA vs. Holitech Technology Co | Hainan HNA vs. Fiberhome Telecommunication Technologies |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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