Correlation Between Hainan Mining and Fuzhou Rockchip
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By analyzing existing cross correlation between Hainan Mining Co and Fuzhou Rockchip Electronics, you can compare the effects of market volatilities on Hainan Mining and Fuzhou Rockchip 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 Fuzhou Rockchip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Mining and Fuzhou Rockchip.
Diversification Opportunities for Hainan Mining and Fuzhou Rockchip
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hainan and Fuzhou is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Mining Co and Fuzhou Rockchip Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuzhou Rockchip Elec 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 Fuzhou Rockchip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuzhou Rockchip Elec has no effect on the direction of Hainan Mining i.e., Hainan Mining and Fuzhou Rockchip go up and down completely randomly.
Pair Corralation between Hainan Mining and Fuzhou Rockchip
Assuming the 90 days trading horizon Hainan Mining is expected to generate 56.81 times less return on investment than Fuzhou Rockchip. But when comparing it to its historical volatility, Hainan Mining Co is 3.25 times less risky than Fuzhou Rockchip. It trades about 0.03 of its potential returns per unit of risk. Fuzhou Rockchip Electronics is currently generating about 0.59 of returns per unit of risk over similar time horizon. If you would invest 9,807 in Fuzhou Rockchip Electronics on November 7, 2024 and sell it today you would earn a total of 6,643 from holding Fuzhou Rockchip Electronics or generate 67.74% 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. Fuzhou Rockchip Electronics
Performance |
| Timeline |
| Hainan Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Fuzhou Rockchip Elec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Hainan Mining and Fuzhou Rockchip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Mining and Fuzhou Rockchip
The main advantage of trading using opposite Hainan Mining and Fuzhou Rockchip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Mining position performs unexpectedly, Fuzhou Rockchip 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 Fuzhou Rockchip will offset losses from the drop in Fuzhou Rockchip's long position.The idea behind Hainan Mining Co and Fuzhou Rockchip Electronics 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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