Correlation Between Hainan Mining and China Railway
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By analyzing existing cross correlation between Hainan Mining Co and China Railway Group, 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
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hainan and China is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Mining Co and China Railway Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway 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 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 Group 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 1.06 times more return on investment than China Railway. However, Hainan Mining is 1.06 times more volatile than China Railway Group. It trades about 0.0 of its potential returns per unit of risk. China Railway Group is currently generating about -0.02 per unit of risk. If you would invest 732.00 in Hainan Mining Co on November 28, 2024 and sell it today you would lose (58.00) from holding Hainan Mining Co or give up 7.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan Mining Co vs. China Railway Group
Performance |
| Timeline |
| Hainan Mining |
| China Railway Group |
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. Penyao Environmental Protection | Hainan Mining vs. Changjiang Jinggong Steel | Hainan Mining vs. Tibet Huayu Mining | Hainan Mining vs. Guangdong Jingyi Metal |
| China Railway vs. Hengerda New Materials | China Railway vs. Songz Automobile Air | China Railway vs. Ningbo Tip Rubber | China Railway vs. TianJin 712 Communication |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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