Correlation Between Hainan Mining and Guoguang Electric
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By analyzing existing cross correlation between Hainan Mining Co and Guoguang Electric Co, you can compare the effects of market volatilities on Hainan Mining and Guoguang Electric 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 Guoguang Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Mining and Guoguang Electric.
Diversification Opportunities for Hainan Mining and Guoguang Electric
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hainan and Guoguang is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Mining Co and Guoguang Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guoguang Electric 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 Guoguang Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guoguang Electric has no effect on the direction of Hainan Mining i.e., Hainan Mining and Guoguang Electric go up and down completely randomly.
Pair Corralation between Hainan Mining and Guoguang Electric
Assuming the 90 days trading horizon Hainan Mining Co is expected to generate 0.56 times more return on investment than Guoguang Electric. However, Hainan Mining Co is 1.79 times less risky than Guoguang Electric. It trades about 0.02 of its potential returns per unit of risk. Guoguang Electric Co is currently generating about 0.0 per unit of risk. If you would invest 673.00 in Hainan Mining Co on September 12, 2024 and sell it today you would earn a total of 54.00 from holding Hainan Mining Co or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.71% |
| Values | Daily Returns |
Hainan Mining Co vs. Guoguang Electric Co
Performance |
| Timeline |
| Hainan Mining |
| Guoguang Electric |
Hainan Mining and Guoguang Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Mining and Guoguang Electric
The main advantage of trading using opposite Hainan Mining and Guoguang Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Mining position performs unexpectedly, Guoguang Electric 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 Guoguang Electric will offset losses from the drop in Guoguang Electric'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 |
| Guoguang Electric vs. Huafa Industrial Co | Guoguang Electric vs. By health | Guoguang Electric vs. Tibet Huayu Mining | Guoguang Electric vs. Hainan Mining Co |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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