Correlation Between Inner Mongolia and Chongqing Shunbo
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By analyzing existing cross correlation between Inner Mongolia BaoTou and Chongqing Shunbo Aluminum, you can compare the effects of market volatilities on Inner Mongolia and Chongqing Shunbo 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 Chongqing Shunbo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inner Mongolia and Chongqing Shunbo.
Diversification Opportunities for Inner Mongolia and Chongqing Shunbo
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Inner and Chongqing is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Inner Mongolia BaoTou and Chongqing Shunbo Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Shunbo Aluminum 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 Chongqing Shunbo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Shunbo Aluminum has no effect on the direction of Inner Mongolia i.e., Inner Mongolia and Chongqing Shunbo go up and down completely randomly.
Pair Corralation between Inner Mongolia and Chongqing Shunbo
Assuming the 90 days trading horizon Inner Mongolia BaoTou is expected to generate 1.72 times more return on investment than Chongqing Shunbo. However, Inner Mongolia is 1.72 times more volatile than Chongqing Shunbo Aluminum. It trades about 0.21 of its potential returns per unit of risk. Chongqing Shunbo Aluminum is currently generating about 0.15 per unit of risk. If you would invest 163.00 in Inner Mongolia BaoTou on August 25, 2024 and sell it today you would earn a total of 31.00 from holding Inner Mongolia BaoTou or generate 19.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inner Mongolia BaoTou vs. Chongqing Shunbo Aluminum
Performance |
| Timeline |
| Inner Mongolia BaoTou |
| Chongqing Shunbo Aluminum |
Inner Mongolia and Chongqing Shunbo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inner Mongolia and Chongqing Shunbo
The main advantage of trading using opposite Inner Mongolia and Chongqing Shunbo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inner Mongolia position performs unexpectedly, Chongqing Shunbo 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 Chongqing Shunbo will offset losses from the drop in Chongqing Shunbo's long position.| Inner Mongolia vs. Focus Media Information | Inner Mongolia vs. Qilu Bank Co | Inner Mongolia vs. Dalian Zeus Entertainment | Inner Mongolia vs. Jiangsu Financial Leasing |
| Chongqing Shunbo vs. Zijin Mining Group | Chongqing Shunbo vs. Wanhua Chemical Group | Chongqing Shunbo vs. Baoshan Iron Steel | Chongqing Shunbo 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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