Correlation Between Iat Automobile and Hainan Mining

Can any of the company-specific risk be diversified away by investing in both Iat Automobile and Hainan Mining 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 Iat Automobile and Hainan Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Iat Automobile Technology and Hainan Mining Co, you can compare the effects of market volatilities on Iat Automobile 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 Iat Automobile with a short position of Hainan Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iat Automobile and Hainan Mining.

Diversification Opportunities for Iat Automobile and Hainan Mining

0.58

Correlation Coefficient

Iat Automobile  Hainan Mining

Very weak diversification

The 3 months correlation between Iat and Hainan is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Iat Automobile Technology and Hainan Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Mining and Iat Automobile 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 Iat Automobile Technology 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 Iat Automobile i.e., Iat Automobile and Hainan Mining go up and down completely randomly.

Pair Corralation between Iat Automobile and Hainan Mining

Assuming the 90 days trading horizon Iat Automobile Technology is expected to generate 1.68 times more return on investment than Hainan Mining. However, Iat Automobile is 1.68 times more volatile than Hainan Mining Co. It trades about 0.01 of its potential returns per unit of risk. Hainan Mining Co is currently generating about 0.0 per unit of risk. If you would invest  1,218  in Iat Automobile Technology on October 10, 2024 and sell it today you would lose (75.00) from holding Iat Automobile Technology or give up 6.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Iat Automobile Technology  vs.  Hainan Mining Co

Iat Automobile Technology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Iat Automobile Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Iat Automobile may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Hainan Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hainan Mining Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Hainan Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Iat Automobile and Hainan Mining

The main advantage of trading using opposite Iat Automobile and Hainan Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iat Automobile 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.

The idea behind Iat Automobile Technology and Hainan Mining Co 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.