Correlation Between Hainan Mining and Chongqing Changan
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By analyzing existing cross correlation between Hainan Mining Co and Chongqing Changan Automobile, you can compare the effects of market volatilities on Hainan Mining and Chongqing Changan 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 Hainan Mining with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Mining and Chongqing Changan.
Diversification Opportunities for Hainan Mining and Chongqing Changan
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hainan and Chongqing is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Mining Co and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and Hainan 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 Hainan Mining Co are associated (or correlated) with Chongqing Changan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Changan has no effect on the direction of Hainan Mining i.e., Hainan Mining and Chongqing Changan go up and down completely randomly.
Pair Corralation between Hainan Mining and Chongqing Changan
Assuming the 90 days trading horizon Hainan Mining is expected to generate 1.04 times less return on investment than Chongqing Changan. But when comparing it to its historical volatility, Hainan Mining Co is 1.62 times less risky than Chongqing Changan. It trades about 0.06 of its potential returns per unit of risk. Chongqing Changan Automobile is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,340 in Chongqing Changan Automobile on August 30, 2024 and sell it today you would earn a total of 22.00 from holding Chongqing Changan Automobile or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan Mining Co vs. Chongqing Changan Automobile
Performance |
| Timeline |
| Hainan Mining |
| Chongqing Changan |
Hainan Mining and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Mining and Chongqing Changan
The main advantage of trading using opposite Hainan Mining and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Mining position performs unexpectedly, Chongqing Changan 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 Chongqing Changan will offset losses from the drop in Chongqing Changan's long position.| Hainan Mining vs. Shanghai Xinhua Media | Hainan Mining vs. Guangzhou KingTeller Technology | Hainan Mining vs. Jiujiang Shanshui Technology | Hainan Mining vs. Sinofibers Technology Co |
| Chongqing Changan vs. Eastern Air Logistics | Chongqing Changan vs. Tongling Nonferrous Metals | Chongqing Changan vs. Hefei Metalforming Mach | Chongqing Changan vs. Ningbo Tech Bank Co |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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