Correlation Between Hainan Haiqi and Shandong Hongchuang
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By analyzing existing cross correlation between Hainan Haiqi Transportation and Shandong Hongchuang Aluminum, you can compare the effects of market volatilities on Hainan Haiqi and Shandong Hongchuang 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 Haiqi with a short position of Shandong Hongchuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Haiqi and Shandong Hongchuang.
Diversification Opportunities for Hainan Haiqi and Shandong Hongchuang
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hainan and Shandong is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Haiqi Transportation and Shandong Hongchuang Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Hongchuang and Hainan Haiqi 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 Haiqi Transportation are associated (or correlated) with Shandong Hongchuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Hongchuang has no effect on the direction of Hainan Haiqi i.e., Hainan Haiqi and Shandong Hongchuang go up and down completely randomly.
Pair Corralation between Hainan Haiqi and Shandong Hongchuang
Assuming the 90 days trading horizon Hainan Haiqi Transportation is expected to under-perform the Shandong Hongchuang. But the stock apears to be less risky and, when comparing its historical volatility, Hainan Haiqi Transportation is 1.46 times less risky than Shandong Hongchuang. The stock trades about -0.05 of its potential returns per unit of risk. The Shandong Hongchuang Aluminum is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 897.00 in Shandong Hongchuang Aluminum on November 1, 2024 and sell it today you would earn a total of 144.00 from holding Shandong Hongchuang Aluminum or generate 16.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Hainan Haiqi Transportation vs. Shandong Hongchuang Aluminum
Performance |
| Timeline |
| Hainan Haiqi Transpo |
| Shandong Hongchuang |
Hainan Haiqi and Shandong Hongchuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Haiqi and Shandong Hongchuang
The main advantage of trading using opposite Hainan Haiqi and Shandong Hongchuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Haiqi position performs unexpectedly, Shandong Hongchuang 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 Shandong Hongchuang will offset losses from the drop in Shandong Hongchuang's long position.| Hainan Haiqi vs. Runjian Communication Co | Hainan Haiqi vs. Sinomach Automobile Co | Hainan Haiqi vs. Quectel Wireless Solutions | Hainan Haiqi vs. Beijing Bewinner Communications |
| Shandong Hongchuang vs. Zijin Mining Group | Shandong Hongchuang vs. Wanhua Chemical Group | Shandong Hongchuang vs. Baoshan Iron Steel | Shandong Hongchuang vs. Shandong Gold Mining |
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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