Correlation Between Hainan Mining and Guangzhou Haige
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By analyzing existing cross correlation between Hainan Mining Co and Guangzhou Haige Communications, you can compare the effects of market volatilities on Hainan Mining and Guangzhou Haige 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 Guangzhou Haige. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Mining and Guangzhou Haige.
Diversification Opportunities for Hainan Mining and Guangzhou Haige
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hainan and Guangzhou is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Mining Co and Guangzhou Haige Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Haige Comm 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 Guangzhou Haige. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Haige Comm has no effect on the direction of Hainan Mining i.e., Hainan Mining and Guangzhou Haige go up and down completely randomly.
Pair Corralation between Hainan Mining and Guangzhou Haige
Assuming the 90 days trading horizon Hainan Mining Co is expected to generate 0.86 times more return on investment than Guangzhou Haige. However, Hainan Mining Co is 1.17 times less risky than Guangzhou Haige. It trades about -0.31 of its potential returns per unit of risk. Guangzhou Haige Communications is currently generating about -0.33 per unit of risk. If you would invest 772.00 in Hainan Mining Co on October 20, 2024 and sell it today you would lose (90.00) from holding Hainan Mining Co or give up 11.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan Mining Co vs. Guangzhou Haige Communications
Performance |
| Timeline |
| Hainan Mining |
| Guangzhou Haige Comm |
Hainan Mining and Guangzhou Haige Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Mining and Guangzhou Haige
The main advantage of trading using opposite Hainan Mining and Guangzhou Haige positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Mining position performs unexpectedly, Guangzhou Haige 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 Guangzhou Haige will offset losses from the drop in Guangzhou Haige's long position.| Hainan Mining vs. Qiaoyin Environmental Tech | Hainan Mining vs. Baoshan Iron Steel | Hainan Mining vs. City Development Environment | Hainan Mining vs. Changjiang Jinggong Steel |
| Guangzhou Haige vs. Allied Machinery Co | Guangzhou Haige vs. Haima Automobile Group | Guangzhou Haige vs. Quectel Wireless Solutions | Guangzhou Haige vs. Shenzhen Zhongzhuang Construction |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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