Correlation Between Hainan Mining and Konfoong Materials
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By analyzing existing cross correlation between Hainan Mining Co and Konfoong Materials International, you can compare the effects of market volatilities on Hainan Mining and Konfoong Materials 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 Konfoong Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Mining and Konfoong Materials.
Diversification Opportunities for Hainan Mining and Konfoong Materials
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hainan and Konfoong is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Mining Co and Konfoong Materials Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konfoong Materials 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 Konfoong Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konfoong Materials has no effect on the direction of Hainan Mining i.e., Hainan Mining and Konfoong Materials go up and down completely randomly.
Pair Corralation between Hainan Mining and Konfoong Materials
Assuming the 90 days trading horizon Hainan Mining is expected to generate 3.56 times less return on investment than Konfoong Materials. But when comparing it to its historical volatility, Hainan Mining Co is 1.41 times less risky than Konfoong Materials. It trades about 0.03 of its potential returns per unit of risk. Konfoong Materials International is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,273 in Konfoong Materials International on November 8, 2024 and sell it today you would earn a total of 2,955 from holding Konfoong Materials International or generate 69.16% 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. Konfoong Materials Internation
Performance |
| Timeline |
| Hainan Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Konfoong Materials |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hainan Mining and Konfoong Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Mining and Konfoong Materials
The main advantage of trading using opposite Hainan Mining and Konfoong Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Mining position performs unexpectedly, Konfoong Materials 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 Konfoong Materials will offset losses from the drop in Konfoong Materials' long position.The idea behind Hainan Mining Co and Konfoong Materials International 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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