Correlation Between Hainan Mining and Lianhe Chemical
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By analyzing existing cross correlation between Hainan Mining Co and Lianhe Chemical Technology, you can compare the effects of market volatilities on Hainan Mining and Lianhe Chemical 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 Lianhe Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Mining and Lianhe Chemical.
Diversification Opportunities for Hainan Mining and Lianhe Chemical
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hainan and Lianhe is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Mining Co and Lianhe Chemical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lianhe Chemical Tech 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 Lianhe Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lianhe Chemical Tech has no effect on the direction of Hainan Mining i.e., Hainan Mining and Lianhe Chemical go up and down completely randomly.
Pair Corralation between Hainan Mining and Lianhe Chemical
Assuming the 90 days trading horizon Hainan Mining Co is expected to under-perform the Lianhe Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Hainan Mining Co is 1.07 times less risky than Lianhe Chemical. The stock trades about -0.05 of its potential returns per unit of risk. The Lianhe Chemical Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 600.00 in Lianhe Chemical Technology on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Lianhe Chemical Technology or generate 0.0% 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. Lianhe Chemical Technology
Performance |
| Timeline |
| Hainan Mining |
| Lianhe Chemical Tech |
Hainan Mining and Lianhe Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Mining and Lianhe Chemical
The main advantage of trading using opposite Hainan Mining and Lianhe Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Mining position performs unexpectedly, Lianhe Chemical 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 Lianhe Chemical will offset losses from the drop in Lianhe Chemical's long position.| Hainan Mining vs. Shandong Gold Mining | Hainan Mining vs. Rongsheng Petrochemical Co | Hainan Mining vs. Inner Mongolia BaoTou | Hainan Mining vs. Jiangxi Ganfeng Lithium |
| Lianhe Chemical vs. Shandong Gold Mining | Lianhe Chemical vs. Rongsheng Petrochemical Co | Lianhe Chemical vs. Inner Mongolia BaoTou | Lianhe Chemical vs. Jiangxi Ganfeng Lithium |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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