Correlation Between Baoshan Iron and North Huajin
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By analyzing existing cross correlation between Baoshan Iron Steel and North Huajin Chemical, you can compare the effects of market volatilities on Baoshan Iron and North Huajin 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 Baoshan Iron with a short position of North Huajin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and North Huajin.
Diversification Opportunities for Baoshan Iron and North Huajin
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Baoshan and North is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and North Huajin Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Huajin Chemical and Baoshan Iron 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 Baoshan Iron Steel are associated (or correlated) with North Huajin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Huajin Chemical has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and North Huajin go up and down completely randomly.
Pair Corralation between Baoshan Iron and North Huajin
Assuming the 90 days trading horizon Baoshan Iron Steel is expected to generate 1.14 times more return on investment than North Huajin. However, Baoshan Iron is 1.14 times more volatile than North Huajin Chemical. It trades about 0.05 of its potential returns per unit of risk. North Huajin Chemical is currently generating about -0.22 per unit of risk. If you would invest 692.00 in Baoshan Iron Steel on November 3, 2024 and sell it today you would earn a total of 9.00 from holding Baoshan Iron Steel or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baoshan Iron Steel vs. North Huajin Chemical
Performance |
| Timeline |
| Baoshan Iron Steel |
| North Huajin Chemical |
Baoshan Iron and North Huajin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baoshan Iron and North Huajin
The main advantage of trading using opposite Baoshan Iron and North Huajin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, North Huajin 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 North Huajin will offset losses from the drop in North Huajin's long position.| Baoshan Iron vs. Beijing Jiaman Dress | Baoshan Iron vs. Inspur Software Co | Baoshan Iron vs. Linewell Software Co | Baoshan Iron vs. Shandong Polymer Biochemicals |
| North Huajin vs. Xiamen Goldenhome Co | North Huajin vs. Beijing Kingsoft Office | North Huajin vs. Zhangjiagang Elegant Home | North Huajin vs. Mengtian Home Group |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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