Correlation Between Huaibei Mining and Citic Guoan
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By analyzing existing cross correlation between Huaibei Mining Holdings and Citic Guoan Wine, you can compare the effects of market volatilities on Huaibei Mining and Citic Guoan 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 Citic Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huaibei Mining and Citic Guoan.
Diversification Opportunities for Huaibei Mining and Citic Guoan
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Huaibei and Citic is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Huaibei Mining Holdings and Citic Guoan Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citic Guoan Wine 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 Citic Guoan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citic Guoan Wine has no effect on the direction of Huaibei Mining i.e., Huaibei Mining and Citic Guoan go up and down completely randomly.
Pair Corralation between Huaibei Mining and Citic Guoan
Assuming the 90 days trading horizon Huaibei Mining Holdings is expected to generate 0.77 times more return on investment than Citic Guoan. However, Huaibei Mining Holdings is 1.3 times less risky than Citic Guoan. It trades about 0.01 of its potential returns per unit of risk. Citic Guoan Wine is currently generating about -0.02 per unit of risk. If you would invest 1,434 in Huaibei Mining Holdings on September 24, 2024 and sell it today you would lose (42.00) from holding Huaibei Mining Holdings or give up 2.93% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Huaibei Mining Holdings vs. Citic Guoan Wine
Performance |
Timeline |
Huaibei Mining Holdings |
Citic Guoan Wine |
Huaibei Mining and Citic Guoan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Huaibei Mining and Citic Guoan
The main advantage of trading using opposite Huaibei Mining and Citic Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huaibei Mining position performs unexpectedly, Citic Guoan 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 Citic Guoan will offset losses from the drop in Citic Guoan's long position.Huaibei Mining vs. Zijin Mining Group | Huaibei Mining vs. Wanhua Chemical Group | Huaibei Mining vs. Baoshan Iron Steel | Huaibei Mining vs. Shandong Gold Mining |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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