Correlation Between Huaibei Mining and Xiamen Bank
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By analyzing existing cross correlation between Huaibei Mining Holdings and Xiamen Bank Co, you can compare the effects of market volatilities on Huaibei Mining and Xiamen Bank 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 Xiamen Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huaibei Mining and Xiamen Bank.
Diversification Opportunities for Huaibei Mining and Xiamen Bank
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Huaibei and Xiamen is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Huaibei Mining Holdings and Xiamen Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Bank 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 Xiamen Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Bank has no effect on the direction of Huaibei Mining i.e., Huaibei Mining and Xiamen Bank go up and down completely randomly.
Pair Corralation between Huaibei Mining and Xiamen Bank
Assuming the 90 days trading horizon Huaibei Mining Holdings is expected to under-perform the Xiamen Bank. But the stock apears to be less risky and, when comparing its historical volatility, Huaibei Mining Holdings is 1.09 times less risky than Xiamen Bank. The stock trades about -0.2 of its potential returns per unit of risk. The Xiamen Bank Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 541.00 in Xiamen Bank Co on September 28, 2024 and sell it today you would earn a total of 22.00 from holding Xiamen Bank Co or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huaibei Mining Holdings vs. Xiamen Bank Co
Performance |
| Timeline |
| Huaibei Mining Holdings |
| Xiamen Bank |
Huaibei Mining and Xiamen Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huaibei Mining and Xiamen Bank
The main advantage of trading using opposite Huaibei Mining and Xiamen Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huaibei Mining position performs unexpectedly, Xiamen Bank 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 Xiamen Bank will offset losses from the drop in Xiamen Bank'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 |
| Xiamen Bank vs. Western Mining Co | Xiamen Bank vs. Shengda Mining Co | Xiamen Bank vs. Huaibei Mining Holdings | Xiamen Bank vs. Zijin Mining 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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