Correlation Between Hainan Mining and Offshore Oil
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By analyzing existing cross correlation between Hainan Mining Co and Offshore Oil Engineering, you can compare the effects of market volatilities on Hainan Mining and Offshore Oil 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 Offshore Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Mining and Offshore Oil.
Diversification Opportunities for Hainan Mining and Offshore Oil
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hainan and Offshore is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Mining Co and Offshore Oil Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Offshore Oil Engineering 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 Offshore Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Offshore Oil Engineering has no effect on the direction of Hainan Mining i.e., Hainan Mining and Offshore Oil go up and down completely randomly.
Pair Corralation between Hainan Mining and Offshore Oil
Assuming the 90 days trading horizon Hainan Mining Co is expected to generate 1.45 times more return on investment than Offshore Oil. However, Hainan Mining is 1.45 times more volatile than Offshore Oil Engineering. It trades about 0.04 of its potential returns per unit of risk. Offshore Oil Engineering is currently generating about -0.03 per unit of risk. If you would invest 676.00 in Hainan Mining Co on August 25, 2024 and sell it today you would earn a total of 9.00 from holding Hainan Mining Co or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan Mining Co vs. Offshore Oil Engineering
Performance |
| Timeline |
| Hainan Mining |
| Offshore Oil Engineering |
Hainan Mining and Offshore Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Mining and Offshore Oil
The main advantage of trading using opposite Hainan Mining and Offshore Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Mining position performs unexpectedly, Offshore Oil 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 Offshore Oil will offset losses from the drop in Offshore Oil's long position.| Hainan Mining vs. Zijin Mining Group | Hainan Mining vs. Wanhua Chemical Group | Hainan Mining vs. Baoshan Iron Steel | Hainan Mining vs. Shandong Gold Mining |
| Offshore Oil vs. Zhejiang Kingland Pipeline | Offshore Oil vs. Xiangyang Automobile Bearing | Offshore Oil vs. COL Digital Publishing | Offshore Oil vs. Suzhou Novoprotein Scientific |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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