Correlation Between Ningxia Younglight and Baoshan Iron
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Baoshan Iron Steel, you can compare the effects of market volatilities on Ningxia Younglight 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 Ningxia Younglight with a short position of Baoshan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Baoshan Iron.
Diversification Opportunities for Ningxia Younglight and Baoshan Iron
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ningxia and Baoshan is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals 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 Ningxia Younglight 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 Ningxia Younglight Chemicals 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 Ningxia Younglight i.e., Ningxia Younglight and Baoshan Iron go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Baoshan Iron
Assuming the 90 days trading horizon Ningxia Younglight Chemicals is expected to generate 1.19 times more return on investment than Baoshan Iron. However, Ningxia Younglight is 1.19 times more volatile than Baoshan Iron Steel. It trades about 0.09 of its potential returns per unit of risk. Baoshan Iron Steel is currently generating about -0.17 per unit of risk. If you would invest 753.00 in Ningxia Younglight Chemicals on November 27, 2024 and sell it today you would earn a total of 18.00 from holding Ningxia Younglight Chemicals or generate 2.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningxia Younglight Chemicals vs. Baoshan Iron Steel
Performance |
| Timeline |
| Ningxia Younglight |
| Baoshan Iron Steel |
Ningxia Younglight and Baoshan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and Baoshan Iron
The main advantage of trading using opposite Ningxia Younglight and Baoshan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight 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.| Ningxia Younglight vs. Zijin Mining Group | Ningxia Younglight vs. Wanhua Chemical Group | Ningxia Younglight vs. Baoshan Iron Steel | Ningxia Younglight vs. Shandong Gold Mining |
| Baoshan Iron vs. China Sports Industry | Baoshan Iron vs. Keda Clean Energy | Baoshan Iron vs. Shaanxi Meineng Clean | Baoshan Iron vs. Guangzhou Haige Communications |
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