Correlation Between Huaibei Mining and Shenzhen Mindray
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By analyzing existing cross correlation between Huaibei Mining Holdings and Shenzhen Mindray Bio Medical, you can compare the effects of market volatilities on Huaibei Mining and Shenzhen Mindray 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 Huaibei Mining with a short position of Shenzhen Mindray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huaibei Mining and Shenzhen Mindray.
Diversification Opportunities for Huaibei Mining and Shenzhen Mindray
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Huaibei and Shenzhen is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Huaibei Mining Holdings and Shenzhen Mindray Bio Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Mindray Bio and Huaibei Mining 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 Huaibei Mining Holdings are associated (or correlated) with Shenzhen Mindray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Mindray Bio has no effect on the direction of Huaibei Mining i.e., Huaibei Mining and Shenzhen Mindray go up and down completely randomly.
Pair Corralation between Huaibei Mining and Shenzhen Mindray
Assuming the 90 days trading horizon Huaibei Mining Holdings is expected to under-perform the Shenzhen Mindray. But the stock apears to be less risky and, when comparing its historical volatility, Huaibei Mining Holdings is 1.26 times less risky than Shenzhen Mindray. The stock trades about -0.18 of its potential returns per unit of risk. The Shenzhen Mindray Bio Medical is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 26,500 in Shenzhen Mindray Bio Medical on September 1, 2024 and sell it today you would lose (451.00) from holding Shenzhen Mindray Bio Medical or give up 1.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huaibei Mining Holdings vs. Shenzhen Mindray Bio Medical
Performance |
| Timeline |
| Huaibei Mining Holdings |
| Shenzhen Mindray Bio |
Huaibei Mining and Shenzhen Mindray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huaibei Mining and Shenzhen Mindray
The main advantage of trading using opposite Huaibei Mining and Shenzhen Mindray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huaibei Mining position performs unexpectedly, Shenzhen Mindray 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 Shenzhen Mindray will offset losses from the drop in Shenzhen Mindray's long position.| Huaibei Mining vs. Zijin Mining Group | Huaibei Mining vs. Baoshan Iron Steel | Huaibei Mining vs. Shandong Gold Mining | Huaibei Mining vs. Rongsheng Petrochemical Co |
| Shenzhen Mindray vs. Beijing Mainstreets Investment | Shenzhen Mindray vs. Harbin Hatou Investment | Shenzhen Mindray vs. Shuhua Sports Co | Shenzhen Mindray vs. Hunan Investment Group |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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