Correlation Between Hainan Mining and Hubei Forbon
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By analyzing existing cross correlation between Hainan Mining Co and Hubei Forbon Technology, you can compare the effects of market volatilities on Hainan Mining and Hubei Forbon 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 Hainan Mining with a short position of Hubei Forbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Mining and Hubei Forbon.
Diversification Opportunities for Hainan Mining and Hubei Forbon
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hainan and Hubei is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Mining Co and Hubei Forbon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Forbon Technology and Hainan 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 Hainan Mining Co are associated (or correlated) with Hubei Forbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Forbon Technology has no effect on the direction of Hainan Mining i.e., Hainan Mining and Hubei Forbon go up and down completely randomly.
Pair Corralation between Hainan Mining and Hubei Forbon
Assuming the 90 days trading horizon Hainan Mining Co is expected to generate 0.76 times more return on investment than Hubei Forbon. However, Hainan Mining Co is 1.32 times less risky than Hubei Forbon. It trades about 0.13 of its potential returns per unit of risk. Hubei Forbon Technology is currently generating about 0.03 per unit of risk. If you would invest 691.00 in Hainan Mining Co on September 26, 2024 and sell it today you would earn a total of 57.00 from holding Hainan Mining Co or generate 8.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Hainan Mining Co vs. Hubei Forbon Technology
Performance |
Timeline |
Hainan Mining |
Hubei Forbon Technology |
Hainan Mining and Hubei Forbon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hainan Mining and Hubei Forbon
The main advantage of trading using opposite Hainan Mining and Hubei Forbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Mining position performs unexpectedly, Hubei Forbon 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 Hubei Forbon will offset losses from the drop in Hubei Forbon's long position.Hainan Mining vs. Wanhua Chemical Group | Hainan Mining vs. Shandong Gold Mining | Hainan Mining vs. Rongsheng Petrochemical Co | Hainan Mining vs. Inner Mongolia BaoTou |
Hubei Forbon vs. Zijin Mining Group | Hubei Forbon vs. Wanhua Chemical Group | Hubei Forbon vs. Baoshan Iron Steel | Hubei Forbon vs. Shandong Gold Mining |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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