Correlation Between Hainan Mining and Shaanxi Meineng
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By analyzing existing cross correlation between Hainan Mining Co and Shaanxi Meineng Clean, you can compare the effects of market volatilities on Hainan Mining and Shaanxi Meineng 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 Shaanxi Meineng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Mining and Shaanxi Meineng.
Diversification Opportunities for Hainan Mining and Shaanxi Meineng
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hainan and Shaanxi is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Mining Co and Shaanxi Meineng Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Meineng Clean 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 Shaanxi Meineng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Meineng Clean has no effect on the direction of Hainan Mining i.e., Hainan Mining and Shaanxi Meineng go up and down completely randomly.
Pair Corralation between Hainan Mining and Shaanxi Meineng
Assuming the 90 days trading horizon Hainan Mining is expected to generate 3.9 times less return on investment than Shaanxi Meineng. But when comparing it to its historical volatility, Hainan Mining Co is 1.11 times less risky than Shaanxi Meineng. It trades about 0.03 of its potential returns per unit of risk. Shaanxi Meineng Clean is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,212 in Shaanxi Meineng Clean on November 7, 2024 and sell it today you would earn a total of 43.00 from holding Shaanxi Meineng Clean or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan Mining Co vs. Shaanxi Meineng Clean
Performance |
| Timeline |
| Hainan Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shaanxi Meineng Clean |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hainan Mining and Shaanxi Meineng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Mining and Shaanxi Meineng
The main advantage of trading using opposite Hainan Mining and Shaanxi Meineng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Mining position performs unexpectedly, Shaanxi Meineng 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 Shaanxi Meineng will offset losses from the drop in Shaanxi Meineng's long position.The idea behind Hainan Mining Co and Shaanxi Meineng Clean 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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