Correlation Between Hainan Mining and Shanghai Newtouch
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By analyzing existing cross correlation between Hainan Mining Co and Shanghai Newtouch Software, you can compare the effects of market volatilities on Hainan Mining and Shanghai Newtouch 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 Shanghai Newtouch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Mining and Shanghai Newtouch.
Diversification Opportunities for Hainan Mining and Shanghai Newtouch
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hainan and Shanghai is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Mining Co and Shanghai Newtouch Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Newtouch 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 Shanghai Newtouch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Newtouch has no effect on the direction of Hainan Mining i.e., Hainan Mining and Shanghai Newtouch go up and down completely randomly.
Pair Corralation between Hainan Mining and Shanghai Newtouch
Assuming the 90 days trading horizon Hainan Mining Co is expected to generate 0.54 times more return on investment than Shanghai Newtouch. However, Hainan Mining Co is 1.84 times less risky than Shanghai Newtouch. It trades about -0.26 of its potential returns per unit of risk. Shanghai Newtouch Software is currently generating about -0.36 per unit of risk. If you would invest 749.00 in Hainan Mining Co on October 23, 2024 and sell it today you would lose (71.00) from holding Hainan Mining Co or give up 9.48% 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. Shanghai Newtouch Software
Performance |
| Timeline |
| Hainan Mining |
| Shanghai Newtouch |
Hainan Mining and Shanghai Newtouch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Mining and Shanghai Newtouch
The main advantage of trading using opposite Hainan Mining and Shanghai Newtouch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Mining position performs unexpectedly, Shanghai Newtouch 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 Shanghai Newtouch will offset losses from the drop in Shanghai Newtouch's long position.| Hainan Mining vs. Dongfeng Automobile Co | Hainan Mining vs. Central Plains Environment | Hainan Mining vs. Fujian Nanwang Environment | Hainan Mining vs. Baoshan Iron Steel |
| Shanghai Newtouch vs. Aba Chemicals Corp | Shanghai Newtouch vs. HeNan Splendor Science | Shanghai Newtouch vs. Hubei Xingfa Chemicals | Shanghai Newtouch vs. Dymatic Chemicals |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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