Correlation Between Inner Mongolia and Boai NKY
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By analyzing existing cross correlation between Inner Mongolia BaoTou and Boai NKY Pharmaceuticals, you can compare the effects of market volatilities on Inner Mongolia and Boai NKY 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 Boai NKY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inner Mongolia and Boai NKY.
Diversification Opportunities for Inner Mongolia and Boai NKY
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Inner and Boai is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Inner Mongolia BaoTou and Boai NKY Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boai NKY Pharmaceuticals 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 Boai NKY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boai NKY Pharmaceuticals has no effect on the direction of Inner Mongolia i.e., Inner Mongolia and Boai NKY go up and down completely randomly.
Pair Corralation between Inner Mongolia and Boai NKY
Assuming the 90 days trading horizon Inner Mongolia BaoTou is expected to generate 0.57 times more return on investment than Boai NKY. However, Inner Mongolia BaoTou is 1.76 times less risky than Boai NKY. It trades about 0.06 of its potential returns per unit of risk. Boai NKY Pharmaceuticals is currently generating about 0.0 per unit of risk. If you would invest 154.00 in Inner Mongolia BaoTou on September 4, 2024 and sell it today you would earn a total of 43.00 from holding Inner Mongolia BaoTou or generate 27.92% 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. Boai NKY Pharmaceuticals
Performance |
| Timeline |
| Inner Mongolia BaoTou |
| Boai NKY Pharmaceuticals |
Inner Mongolia and Boai NKY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inner Mongolia and Boai NKY
The main advantage of trading using opposite Inner Mongolia and Boai NKY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inner Mongolia position performs unexpectedly, Boai NKY 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 Boai NKY will offset losses from the drop in Boai NKY's long position.| Inner Mongolia vs. Zijin Mining Group | Inner Mongolia vs. Wanhua Chemical Group | Inner Mongolia vs. Baoshan Iron Steel | Inner Mongolia vs. Rongsheng Petrochemical Co |
| Boai NKY vs. Zijin Mining Group | Boai NKY vs. Wanhua Chemical Group | Boai NKY vs. Baoshan Iron Steel | Boai NKY vs. Rongsheng Petrochemical Co |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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