Correlation Between Henan Shenhuo and Bomin Electronics
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By analyzing existing cross correlation between Henan Shenhuo Coal and Bomin Electronics Co, you can compare the effects of market volatilities on Henan Shenhuo and Bomin Electronics 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 Henan Shenhuo with a short position of Bomin Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henan Shenhuo and Bomin Electronics.
Diversification Opportunities for Henan Shenhuo and Bomin Electronics
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Henan and Bomin is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Henan Shenhuo Coal and Bomin Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bomin Electronics and Henan Shenhuo 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 Henan Shenhuo Coal are associated (or correlated) with Bomin Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bomin Electronics has no effect on the direction of Henan Shenhuo i.e., Henan Shenhuo and Bomin Electronics go up and down completely randomly.
Pair Corralation between Henan Shenhuo and Bomin Electronics
Assuming the 90 days trading horizon Henan Shenhuo Coal is expected to generate 1.17 times more return on investment than Bomin Electronics. However, Henan Shenhuo is 1.17 times more volatile than Bomin Electronics Co. It trades about 0.04 of its potential returns per unit of risk. Bomin Electronics Co is currently generating about -0.04 per unit of risk. If you would invest 1,684 in Henan Shenhuo Coal on September 20, 2024 and sell it today you would earn a total of 22.00 from holding Henan Shenhuo Coal or generate 1.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.65% |
Values | Daily Returns |
Henan Shenhuo Coal vs. Bomin Electronics Co
Performance |
Timeline |
Henan Shenhuo Coal |
Bomin Electronics |
Henan Shenhuo and Bomin Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Henan Shenhuo and Bomin Electronics
The main advantage of trading using opposite Henan Shenhuo and Bomin Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henan Shenhuo position performs unexpectedly, Bomin Electronics 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 Bomin Electronics will offset losses from the drop in Bomin Electronics' long position.Henan Shenhuo vs. Grandblue Environment Co | Henan Shenhuo vs. Shenzhen MYS Environmental | Henan Shenhuo vs. Qiaoyin Environmental Tech | Henan Shenhuo vs. Sinocat Environmental Technology |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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