Correlation Between Zhongshan Public and Baoshan Iron
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By analyzing existing cross correlation between Zhongshan Public Utilities and Baoshan Iron Steel, you can compare the effects of market volatilities on Zhongshan Public 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 Zhongshan Public with a short position of Baoshan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongshan Public and Baoshan Iron.
Diversification Opportunities for Zhongshan Public and Baoshan Iron
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhongshan and Baoshan is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Zhongshan Public Utilities 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 Zhongshan Public 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 Zhongshan Public Utilities 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 Zhongshan Public i.e., Zhongshan Public and Baoshan Iron go up and down completely randomly.
Pair Corralation between Zhongshan Public and Baoshan Iron
Assuming the 90 days trading horizon Zhongshan Public Utilities is expected to under-perform the Baoshan Iron. But the stock apears to be less risky and, when comparing its historical volatility, Zhongshan Public Utilities is 1.03 times less risky than Baoshan Iron. The stock trades about -0.18 of its potential returns per unit of risk. The Baoshan Iron Steel is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 675.00 in Baoshan Iron Steel on October 14, 2024 and sell it today you would lose (20.00) from holding Baoshan Iron Steel or give up 2.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongshan Public Utilities vs. Baoshan Iron Steel
Performance |
| Timeline |
| Zhongshan Public Uti |
| Baoshan Iron Steel |
Zhongshan Public and Baoshan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongshan Public and Baoshan Iron
The main advantage of trading using opposite Zhongshan Public and Baoshan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongshan Public 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.| Zhongshan Public vs. Runjian Communication Co | Zhongshan Public vs. State Grid InformationCommunication | Zhongshan Public vs. Wuhan Yangtze Communication | Zhongshan Public vs. Western Metal Materials |
| Baoshan Iron vs. Dalian Thermal Power | Baoshan Iron vs. Uroica Mining Safety | Baoshan Iron vs. Zhongshan Public Utilities | Baoshan Iron vs. Rising Nonferrous Metals |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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