Correlation Between Inner Mongolia and Shanxi Tond
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By analyzing existing cross correlation between Inner Mongolia BaoTou and Shanxi Tond Chemical, you can compare the effects of market volatilities on Inner Mongolia and Shanxi Tond 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 Inner Mongolia with a short position of Shanxi Tond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inner Mongolia and Shanxi Tond.
Diversification Opportunities for Inner Mongolia and Shanxi Tond
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Inner and Shanxi is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Inner Mongolia BaoTou and Shanxi Tond Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanxi Tond Chemical and Inner Mongolia 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 Inner Mongolia BaoTou are associated (or correlated) with Shanxi Tond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanxi Tond Chemical has no effect on the direction of Inner Mongolia i.e., Inner Mongolia and Shanxi Tond go up and down completely randomly.
Pair Corralation between Inner Mongolia and Shanxi Tond
Assuming the 90 days trading horizon Inner Mongolia BaoTou is expected to under-perform the Shanxi Tond. But the stock apears to be less risky and, when comparing its historical volatility, Inner Mongolia BaoTou is 1.32 times less risky than Shanxi Tond. The stock trades about -0.08 of its potential returns per unit of risk. The Shanxi Tond Chemical is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 560.00 in Shanxi Tond Chemical on September 26, 2024 and sell it today you would lose (14.00) from holding Shanxi Tond Chemical or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inner Mongolia BaoTou vs. Shanxi Tond Chemical
Performance |
| Timeline |
| Inner Mongolia BaoTou |
| Shanxi Tond Chemical |
Inner Mongolia and Shanxi Tond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inner Mongolia and Shanxi Tond
The main advantage of trading using opposite Inner Mongolia and Shanxi Tond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inner Mongolia position performs unexpectedly, Shanxi Tond 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 Shanxi Tond will offset losses from the drop in Shanxi Tond's long position.| Inner Mongolia vs. Wanhua Chemical Group | Inner Mongolia vs. Shandong Gold Mining | Inner Mongolia vs. Rongsheng Petrochemical Co | Inner Mongolia vs. Jiangxi Ganfeng Lithium |
| Shanxi Tond vs. Zijin Mining Group | Shanxi Tond vs. Wanhua Chemical Group | Shanxi Tond vs. Baoshan Iron Steel | Shanxi Tond 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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