Correlation Between Offshore Oil and Hainan Mining
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By analyzing existing cross correlation between Offshore Oil Engineering and Hainan Mining Co, you can compare the effects of market volatilities on Offshore Oil 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 Offshore Oil with a short position of Hainan Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Offshore Oil and Hainan Mining.
Diversification Opportunities for Offshore Oil and Hainan Mining
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Offshore and Hainan is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Offshore Oil Engineering and Hainan Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Mining and Offshore Oil 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 Offshore Oil Engineering 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 Offshore Oil i.e., Offshore Oil and Hainan Mining go up and down completely randomly.
Pair Corralation between Offshore Oil and Hainan Mining
Assuming the 90 days trading horizon Offshore Oil Engineering is expected to under-perform the Hainan Mining. But the stock apears to be less risky and, when comparing its historical volatility, Offshore Oil Engineering is 1.43 times less risky than Hainan Mining. The stock trades about -0.13 of its potential returns per unit of risk. The Hainan Mining Co is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 715.00 in Hainan Mining Co on August 29, 2024 and sell it today you would lose (30.00) from holding Hainan Mining Co or give up 4.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Offshore Oil Engineering vs. Hainan Mining Co
Performance |
| Timeline |
| Offshore Oil Engineering |
| Hainan Mining |
Offshore Oil and Hainan Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Offshore Oil and Hainan Mining
The main advantage of trading using opposite Offshore Oil and Hainan Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Offshore Oil 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.| Offshore Oil vs. Heren Health Co | Offshore Oil vs. RoadMain T Co | Offshore Oil vs. Meinian Onehealth Healthcare | Offshore Oil vs. Dezhan HealthCare Co |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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