Correlation Between Hoshine Silicon and Jinhui Mining

Can any of the company-specific risk be diversified away by investing in both Hoshine Silicon and Jinhui Mining 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 Hoshine Silicon and Jinhui Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hoshine Silicon Ind and Jinhui Mining Co, you can compare the effects of market volatilities on Hoshine Silicon and Jinhui 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 Hoshine Silicon with a short position of Jinhui Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hoshine Silicon and Jinhui Mining.

Diversification Opportunities for Hoshine Silicon and Jinhui Mining

0.53

Correlation Coefficient

Hoshine Silicon  Jinhui Mining

Very weak diversification

The 3 months correlation between Hoshine and Jinhui is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hoshine Silicon Ind and Jinhui Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinhui Mining and Hoshine Silicon 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 Hoshine Silicon Ind are associated (or correlated) with Jinhui Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinhui Mining has no effect on the direction of Hoshine Silicon i.e., Hoshine Silicon and Jinhui Mining go up and down completely randomly.

Pair Corralation between Hoshine Silicon and Jinhui Mining

Assuming the 90 days trading horizon Hoshine Silicon Ind is expected to generate 1.43 times more return on investment than Jinhui Mining. However, Hoshine Silicon is 1.43 times more volatile than Jinhui Mining Co. It trades about -0.08 of its potential returns per unit of risk. Jinhui Mining Co is currently generating about -0.11 per unit of risk. If you would invest  6,297  in Hoshine Silicon Ind on October 7, 2024 and sell it today you would lose (914.00) from holding Hoshine Silicon Ind or give up 14.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Hoshine Silicon Ind  vs.  Jinhui Mining Co

Hoshine Silicon Ind

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hoshine Silicon Ind has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Jinhui Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jinhui Mining Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Hoshine Silicon and Jinhui Mining

The main advantage of trading using opposite Hoshine Silicon and Jinhui Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hoshine Silicon position performs unexpectedly, Jinhui 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 Jinhui Mining will offset losses from the drop in Jinhui Mining's long position.

The idea behind Hoshine Silicon Ind and Jinhui Mining Co 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.

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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.