Correlation Between Tongling Nonferrous and Bengang Steel
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By analyzing existing cross correlation between Tongling Nonferrous Metals and Bengang Steel Plates, you can compare the effects of market volatilities on Tongling Nonferrous and Bengang Steel 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 Tongling Nonferrous with a short position of Bengang Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongling Nonferrous and Bengang Steel.
Diversification Opportunities for Tongling Nonferrous and Bengang Steel
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tongling and Bengang is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Tongling Nonferrous Metals and Bengang Steel Plates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bengang Steel Plates and Tongling Nonferrous 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 Tongling Nonferrous Metals are associated (or correlated) with Bengang Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bengang Steel Plates has no effect on the direction of Tongling Nonferrous i.e., Tongling Nonferrous and Bengang Steel go up and down completely randomly.
Pair Corralation between Tongling Nonferrous and Bengang Steel
Assuming the 90 days trading horizon Tongling Nonferrous is expected to generate 1.63 times less return on investment than Bengang Steel. But when comparing it to its historical volatility, Tongling Nonferrous Metals is 1.15 times less risky than Bengang Steel. It trades about 0.01 of its potential returns per unit of risk. Bengang Steel Plates is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 297.00 in Bengang Steel Plates on October 7, 2024 and sell it today you would earn a total of 9.00 from holding Bengang Steel Plates or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tongling Nonferrous Metals vs. Bengang Steel Plates
Performance |
| Timeline |
| Tongling Nonferrous |
| Bengang Steel Plates |
Tongling Nonferrous and Bengang Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongling Nonferrous and Bengang Steel
The main advantage of trading using opposite Tongling Nonferrous and Bengang Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongling Nonferrous position performs unexpectedly, Bengang Steel 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 Bengang Steel will offset losses from the drop in Bengang Steel's long position.| Tongling Nonferrous vs. Zijin Mining Group | Tongling Nonferrous vs. Wanhua Chemical Group | Tongling Nonferrous vs. Baoshan Iron Steel | Tongling Nonferrous vs. Rongsheng Petrochemical Co |
| Bengang Steel vs. Zijin Mining Group | Bengang Steel vs. Wanhua Chemical Group | Bengang Steel vs. Baoshan Iron Steel | Bengang Steel vs. Rongsheng Petrochemical Co |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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