Correlation Between Hainan Mining and Nuode Investment
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By analyzing existing cross correlation between Hainan Mining Co and Nuode Investment Co, you can compare the effects of market volatilities on Hainan Mining and Nuode Investment 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 Nuode Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Mining and Nuode Investment.
Diversification Opportunities for Hainan Mining and Nuode Investment
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hainan and Nuode is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Mining Co and Nuode Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuode Investment 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 Nuode Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuode Investment has no effect on the direction of Hainan Mining i.e., Hainan Mining and Nuode Investment go up and down completely randomly.
Pair Corralation between Hainan Mining and Nuode Investment
Assuming the 90 days trading horizon Hainan Mining Co is expected to generate 0.98 times more return on investment than Nuode Investment. However, Hainan Mining Co is 1.02 times less risky than Nuode Investment. It trades about -0.01 of its potential returns per unit of risk. Nuode Investment Co is currently generating about -0.11 per unit of risk. If you would invest 675.00 in Hainan Mining Co on November 8, 2024 and sell it today you would lose (4.00) from holding Hainan Mining Co or give up 0.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan Mining Co vs. Nuode Investment Co
Performance |
| Timeline |
| Hainan Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nuode Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hainan Mining and Nuode Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Mining and Nuode Investment
The main advantage of trading using opposite Hainan Mining and Nuode Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Mining position performs unexpectedly, Nuode Investment 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 Nuode Investment will offset losses from the drop in Nuode Investment's long position.The idea behind Hainan Mining Co and Nuode Investment Co 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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