Correlation Between Hainan Mining and China Railway
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By analyzing existing cross correlation between Hainan Mining Co and China Railway Construction, you can compare the effects of market volatilities on Hainan Mining and China Railway 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 China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Mining and China Railway.
Diversification Opportunities for Hainan Mining and China Railway
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hainan and China is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Mining Co and China Railway Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Constr 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 China Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Constr has no effect on the direction of Hainan Mining i.e., Hainan Mining and China Railway go up and down completely randomly.
Pair Corralation between Hainan Mining and China Railway
Assuming the 90 days trading horizon Hainan Mining Co is expected to generate 0.98 times more return on investment than China Railway. However, Hainan Mining Co is 1.02 times less risky than China Railway. It trades about 0.17 of its potential returns per unit of risk. China Railway Construction is currently generating about 0.04 per unit of risk. If you would invest 700.00 in Hainan Mining Co on September 4, 2024 and sell it today you would earn a total of 73.00 from holding Hainan Mining Co or generate 10.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan Mining Co vs. China Railway Construction
Performance |
| Timeline |
| Hainan Mining |
| China Railway Constr |
Hainan Mining and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Mining and China Railway
The main advantage of trading using opposite Hainan Mining and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Mining position performs unexpectedly, China Railway 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 China Railway will offset losses from the drop in China Railway's long position.| Hainan Mining vs. Zijin Mining Group | Hainan Mining vs. Wanhua Chemical Group | Hainan Mining vs. Baoshan Iron Steel | Hainan Mining vs. Rongsheng Petrochemical Co |
| China Railway vs. Jiangxi Hengda Hi Tech | China Railway vs. Eastern Communications Co | China Railway vs. Northking Information Technology | China Railway vs. Sichuan Jinshi Technology |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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