Correlation Between Miracll Chemicals and Hunan Investment

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Can any of the company-specific risk be diversified away by investing in both Miracll Chemicals and Hunan Investment 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 Miracll Chemicals and Hunan Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Miracll Chemicals Co and Hunan Investment Group, you can compare the effects of market volatilities on Miracll Chemicals and Hunan Investment 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 Miracll Chemicals with a short position of Hunan Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miracll Chemicals and Hunan Investment.

Diversification Opportunities for Miracll Chemicals and Hunan Investment

MiracllHunanDiversified AwayMiracllHunanDiversified Away100%
0.79
  Correlation Coefficient

Poor diversification

The 3 months correlation between Miracll and Hunan is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Miracll Chemicals Co and Hunan Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Investment and Miracll Chemicals 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 Miracll Chemicals Co are associated (or correlated) with Hunan Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Investment has no effect on the direction of Miracll Chemicals i.e., Miracll Chemicals and Hunan Investment go up and down completely randomly.

Pair Corralation between Miracll Chemicals and Hunan Investment

Assuming the 90 days trading horizon Miracll Chemicals is expected to generate 1.01 times less return on investment than Hunan Investment. In addition to that, Miracll Chemicals is 1.32 times more volatile than Hunan Investment Group. It trades about 0.17 of its total potential returns per unit of risk. Hunan Investment Group is currently generating about 0.23 per unit of volatility. If you would invest  392.00  in Hunan Investment Group on September 15, 2024 and sell it today you would earn a total of  207.00  from holding Hunan Investment Group or generate 52.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Miracll Chemicals Co  vs.  Hunan Investment Group

 Performance 
JavaScript chart by amCharts 3.21.15OctNov 010203040506070
JavaScript chart by amCharts 3.21.15300848 000548
       Timeline  
Miracll Chemicals 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Miracll Chemicals Co are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Miracll Chemicals sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec141618202224
Hunan Investment 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Hunan Investment Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hunan Investment sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec44.555.566.57

Miracll Chemicals and Hunan Investment Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-12.93-9.68-6.44-3.190.03.326.8110.3113.817.29 0.0100.0150.0200.0250.0300.035
JavaScript chart by amCharts 3.21.15300848 000548
       Returns  

Pair Trading with Miracll Chemicals and Hunan Investment

The main advantage of trading using opposite Miracll Chemicals and Hunan Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miracll Chemicals position performs unexpectedly, Hunan Investment 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 Hunan Investment will offset losses from the drop in Hunan Investment's long position.
The idea behind Miracll Chemicals Co and Hunan Investment Group 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.
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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