Correlation Between Inner Mongolia and Elite Color
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By analyzing existing cross correlation between Inner Mongolia BaoTou and Elite Color Environmental, you can compare the effects of market volatilities on Inner Mongolia and Elite Color 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 Elite Color. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inner Mongolia and Elite Color.
Diversification Opportunities for Inner Mongolia and Elite Color
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Inner and Elite is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Inner Mongolia BaoTou and Elite Color Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elite Color Environmental 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 Elite Color. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elite Color Environmental has no effect on the direction of Inner Mongolia i.e., Inner Mongolia and Elite Color go up and down completely randomly.
Pair Corralation between Inner Mongolia and Elite Color
Assuming the 90 days trading horizon Inner Mongolia BaoTou is expected to generate 0.77 times more return on investment than Elite Color. However, Inner Mongolia BaoTou is 1.3 times less risky than Elite Color. It trades about 0.03 of its potential returns per unit of risk. Elite Color Environmental is currently generating about 0.0 per unit of risk. If you would invest 172.00 in Inner Mongolia BaoTou on August 29, 2024 and sell it today you would earn a total of 21.00 from holding Inner Mongolia BaoTou or generate 12.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inner Mongolia BaoTou vs. Elite Color Environmental
Performance |
| Timeline |
| Inner Mongolia BaoTou |
| Elite Color Environmental |
Inner Mongolia and Elite Color Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inner Mongolia and Elite Color
The main advantage of trading using opposite Inner Mongolia and Elite Color positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inner Mongolia position performs unexpectedly, Elite Color 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 Elite Color will offset losses from the drop in Elite Color's long position.| Inner Mongolia vs. Pengxin International Mining | Inner Mongolia vs. Tibet Huayu Mining | Inner Mongolia vs. Western Metal Materials | Inner Mongolia vs. Shandong Longquan Pipeline |
| Elite Color vs. Shandong Gold Mining | Elite Color vs. Rongsheng Petrochemical Co | Elite Color vs. Inner Mongolia BaoTou | Elite Color vs. Jiangxi Ganfeng Lithium |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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