Correlation Between Dynagreen Environmental and Huaibei Mining
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By analyzing existing cross correlation between Dynagreen Environmental Protection and Huaibei Mining Holdings, you can compare the effects of market volatilities on Dynagreen Environmental and Huaibei 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 Dynagreen Environmental with a short position of Huaibei Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynagreen Environmental and Huaibei Mining.
Diversification Opportunities for Dynagreen Environmental and Huaibei Mining
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dynagreen and Huaibei is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Dynagreen Environmental Protec and Huaibei Mining Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huaibei Mining Holdings and Dynagreen Environmental 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 Dynagreen Environmental Protection are associated (or correlated) with Huaibei Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huaibei Mining Holdings has no effect on the direction of Dynagreen Environmental i.e., Dynagreen Environmental and Huaibei Mining go up and down completely randomly.
Pair Corralation between Dynagreen Environmental and Huaibei Mining
Assuming the 90 days trading horizon Dynagreen Environmental is expected to generate 8.32 times less return on investment than Huaibei Mining. But when comparing it to its historical volatility, Dynagreen Environmental Protection is 1.83 times less risky than Huaibei Mining. It trades about 0.02 of its potential returns per unit of risk. Huaibei Mining Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,350 in Huaibei Mining Holdings on November 8, 2024 and sell it today you would earn a total of 22.00 from holding Huaibei Mining Holdings or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dynagreen Environmental Protec vs. Huaibei Mining Holdings
Performance |
| Timeline |
| Dynagreen Environmental |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Huaibei Mining Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Dynagreen Environmental and Huaibei Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynagreen Environmental and Huaibei Mining
The main advantage of trading using opposite Dynagreen Environmental and Huaibei Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynagreen Environmental position performs unexpectedly, Huaibei 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 Huaibei Mining will offset losses from the drop in Huaibei Mining's long position.The idea behind Dynagreen Environmental Protection and Huaibei Mining Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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