Correlation Between Tongling Nonferrous and Baoshan Iron
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By analyzing existing cross correlation between Tongling Nonferrous Metals and Baoshan Iron Steel, you can compare the effects of market volatilities on Tongling Nonferrous and Baoshan Iron 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 Baoshan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongling Nonferrous and Baoshan Iron.
Diversification Opportunities for Tongling Nonferrous and Baoshan Iron
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tongling and Baoshan is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Tongling Nonferrous Metals and Baoshan Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baoshan Iron Steel 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 Baoshan Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baoshan Iron Steel has no effect on the direction of Tongling Nonferrous i.e., Tongling Nonferrous and Baoshan Iron go up and down completely randomly.
Pair Corralation between Tongling Nonferrous and Baoshan Iron
Assuming the 90 days trading horizon Tongling Nonferrous Metals is expected to under-perform the Baoshan Iron. In addition to that, Tongling Nonferrous is 1.2 times more volatile than Baoshan Iron Steel. It trades about -0.05 of its total potential returns per unit of risk. Baoshan Iron Steel is currently generating about 0.05 per unit of volatility. If you would invest 669.00 in Baoshan Iron Steel on September 4, 2024 and sell it today you would earn a total of 9.00 from holding Baoshan Iron Steel or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tongling Nonferrous Metals vs. Baoshan Iron Steel
Performance |
| Timeline |
| Tongling Nonferrous |
| Baoshan Iron Steel |
Tongling Nonferrous and Baoshan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongling Nonferrous and Baoshan Iron
The main advantage of trading using opposite Tongling Nonferrous and Baoshan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongling Nonferrous position performs unexpectedly, Baoshan Iron 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 Baoshan Iron will offset losses from the drop in Baoshan Iron'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 |
| Baoshan Iron vs. Zijin Mining Group | Baoshan Iron vs. Wanhua Chemical Group | Baoshan Iron vs. Rongsheng Petrochemical Co | Baoshan Iron 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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