Correlation Between Hongli Group and Hudbay Minerals
Can any of the company-specific risk be diversified away by investing in both Hongli Group and Hudbay Minerals 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 Hongli Group and Hudbay Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hongli Group Ordinary and Hudbay Minerals, you can compare the effects of market volatilities on Hongli Group and Hudbay Minerals 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 Hongli Group with a short position of Hudbay Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hongli Group and Hudbay Minerals.
Diversification Opportunities for Hongli Group and Hudbay Minerals
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hongli and Hudbay is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Hongli Group Ordinary and Hudbay Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudbay Minerals and Hongli Group 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 Hongli Group Ordinary are associated (or correlated) with Hudbay Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudbay Minerals has no effect on the direction of Hongli Group i.e., Hongli Group and Hudbay Minerals go up and down completely randomly.
Pair Corralation between Hongli Group and Hudbay Minerals
Considering the 90-day investment horizon Hongli Group Ordinary is expected to generate 1.64 times more return on investment than Hudbay Minerals. However, Hongli Group is 1.64 times more volatile than Hudbay Minerals. It trades about 0.2 of its potential returns per unit of risk. Hudbay Minerals is currently generating about -0.07 per unit of risk. If you would invest 116.00 in Hongli Group Ordinary on August 28, 2024 and sell it today you would earn a total of 23.00 from holding Hongli Group Ordinary or generate 19.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hongli Group Ordinary vs. Hudbay Minerals
Performance |
| Timeline |
| Hongli Group Ordinary |
| Hudbay Minerals |
Hongli Group and Hudbay Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hongli Group and Hudbay Minerals
The main advantage of trading using opposite Hongli Group and Hudbay Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hongli Group position performs unexpectedly, Hudbay Minerals 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 Hudbay Minerals will offset losses from the drop in Hudbay Minerals' long position.| Hongli Group vs. Labrador Gold Corp | Hongli Group vs. Aurion Resources | Hongli Group vs. Puma Exploration | Hongli Group vs. Golden Star Resource |
| Hudbay Minerals vs. Labrador Gold Corp | Hudbay Minerals vs. Aurion Resources | Hudbay Minerals vs. Puma Exploration | Hudbay Minerals vs. Golden Star Resource |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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