Correlation Between Hainan Mining and Rongcheer Industrial
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By analyzing existing cross correlation between Hainan Mining Co and Rongcheer Industrial Technology, you can compare the effects of market volatilities on Hainan Mining and Rongcheer Industrial 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 Rongcheer Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Mining and Rongcheer Industrial.
Diversification Opportunities for Hainan Mining and Rongcheer Industrial
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hainan and Rongcheer is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Mining Co and Rongcheer Industrial Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rongcheer Industrial 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 Rongcheer Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rongcheer Industrial has no effect on the direction of Hainan Mining i.e., Hainan Mining and Rongcheer Industrial go up and down completely randomly.
Pair Corralation between Hainan Mining and Rongcheer Industrial
Assuming the 90 days trading horizon Hainan Mining is expected to generate 1.03 times less return on investment than Rongcheer Industrial. But when comparing it to its historical volatility, Hainan Mining Co is 1.47 times less risky than Rongcheer Industrial. It trades about 0.18 of its potential returns per unit of risk. Rongcheer Industrial Technology is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,250 in Rongcheer Industrial Technology on September 23, 2024 and sell it today you would earn a total of 1,502 from holding Rongcheer Industrial Technology or generate 35.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Hainan Mining Co vs. Rongcheer Industrial Technolog
Performance |
Timeline |
Hainan Mining |
Rongcheer Industrial |
Hainan Mining and Rongcheer Industrial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hainan Mining and Rongcheer Industrial
The main advantage of trading using opposite Hainan Mining and Rongcheer Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Mining position performs unexpectedly, Rongcheer Industrial 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 Rongcheer Industrial will offset losses from the drop in Rongcheer Industrial's long position.Hainan Mining vs. Wanhua Chemical Group | Hainan Mining vs. Baoshan Iron Steel | Hainan Mining vs. Shandong Gold Mining | Hainan Mining vs. Rongsheng Petrochemical Co |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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