Correlation Between Shanghai Xinhua and Hainan Mining
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By analyzing existing cross correlation between Shanghai Xinhua Media and Hainan Mining Co, you can compare the effects of market volatilities on Shanghai Xinhua 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 Shanghai Xinhua with a short position of Hainan Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Xinhua and Hainan Mining.
Diversification Opportunities for Shanghai Xinhua and Hainan Mining
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Hainan is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Xinhua Media and Hainan Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Mining and Shanghai Xinhua 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 Shanghai Xinhua Media 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 Shanghai Xinhua i.e., Shanghai Xinhua and Hainan Mining go up and down completely randomly.
Pair Corralation between Shanghai Xinhua and Hainan Mining
Assuming the 90 days trading horizon Shanghai Xinhua Media is expected to generate 4.56 times more return on investment than Hainan Mining. However, Shanghai Xinhua is 4.56 times more volatile than Hainan Mining Co. It trades about 0.43 of its potential returns per unit of risk. Hainan Mining Co is currently generating about -0.04 per unit of risk. If you would invest 591.00 in Shanghai Xinhua Media on November 28, 2024 and sell it today you would earn a total of 189.00 from holding Shanghai Xinhua Media or generate 31.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Xinhua Media vs. Hainan Mining Co
Performance |
| Timeline |
| Shanghai Xinhua Media |
| Hainan Mining |
Shanghai Xinhua and Hainan Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Xinhua and Hainan Mining
The main advantage of trading using opposite Shanghai Xinhua and Hainan Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Xinhua 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.| Shanghai Xinhua vs. Tongxing Environmental Protection | Shanghai Xinhua vs. Wangneng Environment Co | Shanghai Xinhua vs. Fangda Special Steel | Shanghai Xinhua vs. Longxing Chemical Stock |
| Hainan Mining vs. Penyao Environmental Protection | Hainan Mining vs. Changjiang Jinggong Steel | Hainan Mining vs. Tibet Huayu Mining | Hainan Mining vs. Guangdong Jingyi Metal |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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