Correlation Between Hainan Mining and Industrial Bank
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By analyzing existing cross correlation between Hainan Mining Co and Industrial Bank Co, you can compare the effects of market volatilities on Hainan Mining and Industrial Bank 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 Industrial Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Mining and Industrial Bank.
Diversification Opportunities for Hainan Mining and Industrial Bank
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hainan and Industrial is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Mining Co and Industrial Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Bank 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 Industrial Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Bank has no effect on the direction of Hainan Mining i.e., Hainan Mining and Industrial Bank go up and down completely randomly.
Pair Corralation between Hainan Mining and Industrial Bank
Assuming the 90 days trading horizon Hainan Mining is expected to generate 5.9 times less return on investment than Industrial Bank. In addition to that, Hainan Mining is 1.38 times more volatile than Industrial Bank Co. It trades about 0.03 of its total potential returns per unit of risk. Industrial Bank Co is currently generating about 0.28 per unit of volatility. If you would invest 1,921 in Industrial Bank Co on November 7, 2024 and sell it today you would earn a total of 110.00 from holding Industrial Bank Co or generate 5.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan Mining Co vs. Industrial Bank Co
Performance |
| Timeline |
| Hainan Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Industrial Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Hainan Mining and Industrial Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Mining and Industrial Bank
The main advantage of trading using opposite Hainan Mining and Industrial Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Mining position performs unexpectedly, Industrial Bank 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 Industrial Bank will offset losses from the drop in Industrial Bank's long position.The idea behind Hainan Mining Co and Industrial Bank 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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