Correlation Between Tibet Huayu and Hainan Mining
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By analyzing existing cross correlation between Tibet Huayu Mining and Hainan Mining Co, you can compare the effects of market volatilities on Tibet Huayu 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 Tibet Huayu with a short position of Hainan Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tibet Huayu and Hainan Mining.
Diversification Opportunities for Tibet Huayu and Hainan Mining
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tibet and Hainan is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Tibet Huayu Mining and Hainan Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Mining and Tibet Huayu 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 Tibet Huayu Mining 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 Tibet Huayu i.e., Tibet Huayu and Hainan Mining go up and down completely randomly.
Pair Corralation between Tibet Huayu and Hainan Mining
Assuming the 90 days trading horizon Tibet Huayu Mining is expected to generate 1.98 times more return on investment than Hainan Mining. However, Tibet Huayu is 1.98 times more volatile than Hainan Mining Co. It trades about 0.09 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 1,222 in Tibet Huayu Mining on August 25, 2024 and sell it today you would earn a total of 89.00 from holding Tibet Huayu Mining or generate 7.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tibet Huayu Mining vs. Hainan Mining Co
Performance |
| Timeline |
| Tibet Huayu Mining |
| Hainan Mining |
Tibet Huayu and Hainan Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tibet Huayu and Hainan Mining
The main advantage of trading using opposite Tibet Huayu and Hainan Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tibet Huayu 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.| Tibet Huayu vs. Hoshine Silicon Ind | Tibet Huayu vs. Nantong Jiangshan Agrochemical | Tibet Huayu vs. Suzhou Mingzhi Technology | Tibet Huayu vs. FSPG Hi Tech Co |
| Hainan Mining vs. Zijin Mining Group | Hainan Mining vs. Wanhua Chemical Group | Hainan Mining vs. Baoshan Iron Steel | Hainan Mining vs. Shandong Gold Mining |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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