Correlation Between Hainan Mining and Chengtun Mining
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By analyzing existing cross correlation between Hainan Mining Co and Chengtun Mining Group, you can compare the effects of market volatilities on Hainan Mining and Chengtun Mining 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 Chengtun Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Mining and Chengtun Mining.
Diversification Opportunities for Hainan Mining and Chengtun Mining
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hainan and Chengtun is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Mining Co and Chengtun Mining Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengtun Mining Group 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 Chengtun Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengtun Mining Group has no effect on the direction of Hainan Mining i.e., Hainan Mining and Chengtun Mining go up and down completely randomly.
Pair Corralation between Hainan Mining and Chengtun Mining
Assuming the 90 days trading horizon Hainan Mining Co is expected to generate 0.89 times more return on investment than Chengtun Mining. However, Hainan Mining Co is 1.12 times less risky than Chengtun Mining. It trades about 0.0 of its potential returns per unit of risk. Chengtun Mining Group is currently generating about -0.01 per unit of risk. If you would invest 734.00 in Hainan Mining Co on August 25, 2024 and sell it today you would lose (49.00) from holding Hainan Mining Co or give up 6.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan Mining Co vs. Chengtun Mining Group
Performance |
| Timeline |
| Hainan Mining |
| Chengtun Mining Group |
Hainan Mining and Chengtun Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Mining and Chengtun Mining
The main advantage of trading using opposite Hainan Mining and Chengtun Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Mining position performs unexpectedly, Chengtun Mining 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 Chengtun Mining will offset losses from the drop in Chengtun Mining'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 |
| Chengtun Mining vs. Zijin Mining Group | Chengtun Mining vs. Wanhua Chemical Group | Chengtun Mining vs. Baoshan Iron Steel | Chengtun Mining vs. Shandong Gold Mining |
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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