Correlation Between Zhongtong Guomai and Hainan Mining
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By analyzing existing cross correlation between Zhongtong Guomai Communication and Hainan Mining Co, you can compare the effects of market volatilities on Zhongtong Guomai and Hainan Mining 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 Zhongtong Guomai with a short position of Hainan Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongtong Guomai and Hainan Mining.
Diversification Opportunities for Zhongtong Guomai and Hainan Mining
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhongtong and Hainan is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Zhongtong Guomai Communication and Hainan Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Mining and Zhongtong Guomai 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 Zhongtong Guomai Communication are associated (or correlated) with Hainan Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Mining has no effect on the direction of Zhongtong Guomai i.e., Zhongtong Guomai and Hainan Mining go up and down completely randomly.
Pair Corralation between Zhongtong Guomai and Hainan Mining
Assuming the 90 days trading horizon Zhongtong Guomai Communication is expected to generate 2.26 times more return on investment than Hainan Mining. However, Zhongtong Guomai is 2.26 times more volatile than Hainan Mining Co. It trades about 0.04 of its potential returns per unit of risk. Hainan Mining Co is currently generating about 0.02 per unit of risk. If you would invest 1,100 in Zhongtong Guomai Communication on September 2, 2024 and sell it today you would earn a total of 21.00 from holding Zhongtong Guomai Communication or generate 1.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongtong Guomai Communication vs. Hainan Mining Co
Performance |
| Timeline |
| Zhongtong Guomai Com |
| Hainan Mining |
Zhongtong Guomai and Hainan Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongtong Guomai and Hainan Mining
The main advantage of trading using opposite Zhongtong Guomai and Hainan Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongtong Guomai position performs unexpectedly, Hainan Mining 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 Hainan Mining will offset losses from the drop in Hainan Mining's long position.| Zhongtong Guomai vs. China Petroleum Chemical | Zhongtong Guomai vs. PetroChina Co Ltd | Zhongtong Guomai vs. China State Construction | Zhongtong Guomai vs. China Railway Group |
| Hainan Mining vs. Zijin Mining Group | Hainan Mining vs. Wanhua Chemical Group | Hainan Mining vs. Baoshan Iron Steel | Hainan Mining 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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