Correlation Between Hainan Mining and Chengdu Kanghua
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By analyzing existing cross correlation between Hainan Mining Co and Chengdu Kanghua Biological, you can compare the effects of market volatilities on Hainan Mining and Chengdu Kanghua 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 Chengdu Kanghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Mining and Chengdu Kanghua.
Diversification Opportunities for Hainan Mining and Chengdu Kanghua
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hainan and Chengdu is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Mining Co and Chengdu Kanghua Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Kanghua Biol 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 Chengdu Kanghua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Kanghua Biol has no effect on the direction of Hainan Mining i.e., Hainan Mining and Chengdu Kanghua go up and down completely randomly.
Pair Corralation between Hainan Mining and Chengdu Kanghua
Assuming the 90 days trading horizon Hainan Mining Co is expected to generate 0.71 times more return on investment than Chengdu Kanghua. However, Hainan Mining Co is 1.41 times less risky than Chengdu Kanghua. It trades about -0.08 of its potential returns per unit of risk. Chengdu Kanghua Biological is currently generating about -0.2 per unit of risk. If you would invest 715.00 in Hainan Mining Co on August 29, 2024 and sell it today you would lose (30.00) from holding Hainan Mining Co or give up 4.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan Mining Co vs. Chengdu Kanghua Biological
Performance |
| Timeline |
| Hainan Mining |
| Chengdu Kanghua Biol |
Hainan Mining and Chengdu Kanghua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Mining and Chengdu Kanghua
The main advantage of trading using opposite Hainan Mining and Chengdu Kanghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Mining position performs unexpectedly, Chengdu Kanghua 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 Chengdu Kanghua will offset losses from the drop in Chengdu Kanghua's long position.| Hainan Mining vs. Baoshan Iron Steel | Hainan Mining vs. Shandong Gold Mining | Hainan Mining vs. Rongsheng Petrochemical Co | Hainan Mining vs. Inner Mongolia BaoTou |
| Chengdu Kanghua vs. Shandong Sanyuan Biotechnology | Chengdu Kanghua vs. Hainan Airlines Co | Chengdu Kanghua vs. Hainan Mining Co | Chengdu Kanghua vs. Jiangsu GDK Biotechnology |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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