Correlation Between B2Gold Corp and Hongli Group

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Can any of the company-specific risk be diversified away by investing in both B2Gold Corp and Hongli Group at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining B2Gold Corp and Hongli Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B2Gold Corp and Hongli Group Ordinary, you can compare the effects of market volatilities on B2Gold Corp and Hongli Group 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 B2Gold Corp with a short position of Hongli Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of B2Gold Corp and Hongli Group.

Diversification Opportunities for B2Gold Corp and Hongli Group

B2GoldHongliDiversified AwayB2GoldHongliDiversified Away100%
-0.29
  Correlation Coefficient

Very good diversification

The 3 months correlation between B2Gold and Hongli is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding B2Gold Corp and Hongli Group Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongli Group Ordinary and B2Gold Corp 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 B2Gold Corp are associated (or correlated) with Hongli Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hongli Group Ordinary has no effect on the direction of B2Gold Corp i.e., B2Gold Corp and Hongli Group go up and down completely randomly.

Pair Corralation between B2Gold Corp and Hongli Group

Considering the 90-day investment horizon B2Gold Corp is expected to generate 0.74 times more return on investment than Hongli Group. However, B2Gold Corp is 1.35 times less risky than Hongli Group. It trades about 0.12 of its potential returns per unit of risk. Hongli Group Ordinary is currently generating about 0.08 per unit of risk. If you would invest  242.00  in B2Gold Corp on November 21, 2024 and sell it today you would earn a total of  12.00  from holding B2Gold Corp or generate 4.96% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

B2Gold Corp  vs.  Hongli Group Ordinary

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-15-10-50510
JavaScript chart by amCharts 3.21.15BTG HLP
       Timeline  
B2Gold Corp 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days B2Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2.22.32.42.52.62.72.82.9
Hongli Group Ordinary 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Hongli Group Ordinary are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak essential indicators, Hongli Group reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.21.31.41.51.6

B2Gold Corp and Hongli Group Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.92-2.94-1.95-0.970.00.881.782.693.594.5 0.020.030.040.050.060.07
JavaScript chart by amCharts 3.21.15BTG HLP
       Returns  

Pair Trading with B2Gold Corp and Hongli Group

The main advantage of trading using opposite B2Gold Corp and Hongli Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B2Gold Corp position performs unexpectedly, Hongli Group 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 Hongli Group will offset losses from the drop in Hongli Group's long position.
The idea behind B2Gold Corp and Hongli Group Ordinary 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.
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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