Correlation Between Shenyang Chemical and Baoshan Iron
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By analyzing existing cross correlation between Shenyang Chemical Industry and Baoshan Iron Steel, you can compare the effects of market volatilities on Shenyang Chemical 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 Shenyang Chemical with a short position of Baoshan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenyang Chemical and Baoshan Iron.
Diversification Opportunities for Shenyang Chemical and Baoshan Iron
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenyang and Baoshan is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Chemical Industry 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 Shenyang Chemical 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 Shenyang Chemical Industry 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 Shenyang Chemical i.e., Shenyang Chemical and Baoshan Iron go up and down completely randomly.
Pair Corralation between Shenyang Chemical and Baoshan Iron
Assuming the 90 days trading horizon Shenyang Chemical is expected to generate 4.16 times less return on investment than Baoshan Iron. In addition to that, Shenyang Chemical is 1.62 times more volatile than Baoshan Iron Steel. It trades about 0.01 of its total potential returns per unit of risk. Baoshan Iron Steel is currently generating about 0.04 per unit of volatility. If you would invest 576.00 in Baoshan Iron Steel on September 12, 2024 and sell it today you would earn a total of 115.00 from holding Baoshan Iron Steel or generate 19.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenyang Chemical Industry vs. Baoshan Iron Steel
Performance |
| Timeline |
| Shenyang Chemical |
| Baoshan Iron Steel |
Shenyang Chemical and Baoshan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenyang Chemical and Baoshan Iron
The main advantage of trading using opposite Shenyang Chemical and Baoshan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenyang Chemical 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.| Shenyang Chemical vs. Zijin Mining Group | Shenyang Chemical vs. Wanhua Chemical Group | Shenyang Chemical vs. Baoshan Iron Steel | Shenyang Chemical 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. Hoshine Silicon Ind |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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