Correlation Between Metro Investment and Henan Shenhuo
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By analyzing existing cross correlation between Metro Investment Development and Henan Shenhuo Coal, you can compare the effects of market volatilities on Metro Investment and Henan Shenhuo 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 Metro Investment with a short position of Henan Shenhuo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Investment and Henan Shenhuo.
Diversification Opportunities for Metro Investment and Henan Shenhuo
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Metro and Henan is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Metro Investment Development and Henan Shenhuo Coal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henan Shenhuo Coal and Metro Investment 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 Metro Investment Development are associated (or correlated) with Henan Shenhuo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henan Shenhuo Coal has no effect on the direction of Metro Investment i.e., Metro Investment and Henan Shenhuo go up and down completely randomly.
Pair Corralation between Metro Investment and Henan Shenhuo
Assuming the 90 days trading horizon Metro Investment is expected to generate 2.37 times less return on investment than Henan Shenhuo. In addition to that, Metro Investment is 1.49 times more volatile than Henan Shenhuo Coal. It trades about 0.01 of its total potential returns per unit of risk. Henan Shenhuo Coal is currently generating about 0.03 per unit of volatility. If you would invest 1,411 in Henan Shenhuo Coal on September 25, 2024 and sell it today you would earn a total of 211.00 from holding Henan Shenhuo Coal or generate 14.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Metro Investment Development vs. Henan Shenhuo Coal
Performance |
Timeline |
Metro Investment Dev |
Henan Shenhuo Coal |
Metro Investment and Henan Shenhuo Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Metro Investment and Henan Shenhuo
The main advantage of trading using opposite Metro Investment and Henan Shenhuo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Investment position performs unexpectedly, Henan Shenhuo 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 Henan Shenhuo will offset losses from the drop in Henan Shenhuo's long position.Metro Investment vs. Jilin Jlu Communication | Metro Investment vs. Fiberhome Telecommunication Technologies | Metro Investment vs. Zhongtong Guomai Communication | Metro Investment vs. Air China Ltd |
Henan Shenhuo vs. Metro Investment Development | Henan Shenhuo vs. Zoje Resources Investment | Henan Shenhuo vs. Cultural Investment Holdings | Henan Shenhuo vs. Beijing Mainstreets 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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