Correlation Between Huaibei Mining and Guocheng Mining
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By analyzing existing cross correlation between Huaibei Mining Holdings and Guocheng Mining Co, you can compare the effects of market volatilities on Huaibei Mining and Guocheng 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 Huaibei Mining with a short position of Guocheng Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huaibei Mining and Guocheng Mining.
Diversification Opportunities for Huaibei Mining and Guocheng Mining
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Huaibei and Guocheng is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Huaibei Mining Holdings and Guocheng Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guocheng Mining and Huaibei 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 Huaibei Mining Holdings are associated (or correlated) with Guocheng Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guocheng Mining has no effect on the direction of Huaibei Mining i.e., Huaibei Mining and Guocheng Mining go up and down completely randomly.
Pair Corralation between Huaibei Mining and Guocheng Mining
Assuming the 90 days trading horizon Huaibei Mining Holdings is expected to under-perform the Guocheng Mining. But the stock apears to be less risky and, when comparing its historical volatility, Huaibei Mining Holdings is 3.25 times less risky than Guocheng Mining. The stock trades about -0.16 of its potential returns per unit of risk. The Guocheng Mining Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,393 in Guocheng Mining Co on September 20, 2024 and sell it today you would earn a total of 81.00 from holding Guocheng Mining Co or generate 5.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Huaibei Mining Holdings vs. Guocheng Mining Co
Performance |
Timeline |
Huaibei Mining Holdings |
Guocheng Mining |
Huaibei Mining and Guocheng Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Huaibei Mining and Guocheng Mining
The main advantage of trading using opposite Huaibei Mining and Guocheng Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huaibei Mining position performs unexpectedly, Guocheng 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 Guocheng Mining will offset losses from the drop in Guocheng Mining's long position.Huaibei Mining vs. Zhongshan Broad Ocean Motor | Huaibei Mining vs. Nuode Investment Co | Huaibei Mining vs. Henan Shuanghui Investment | Huaibei Mining vs. Jointo Energy Investment |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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