Correlation Between Baoshan Iron and Jiaozuo Wanfang
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By analyzing existing cross correlation between Baoshan Iron Steel and Jiaozuo Wanfang Aluminum, you can compare the effects of market volatilities on Baoshan Iron and Jiaozuo Wanfang 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 Jiaozuo Wanfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Jiaozuo Wanfang.
Diversification Opportunities for Baoshan Iron and Jiaozuo Wanfang
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baoshan and Jiaozuo is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Jiaozuo Wanfang Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiaozuo Wanfang Aluminum 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 Jiaozuo Wanfang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiaozuo Wanfang Aluminum has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Jiaozuo Wanfang go up and down completely randomly.
Pair Corralation between Baoshan Iron and Jiaozuo Wanfang
Assuming the 90 days trading horizon Baoshan Iron is expected to generate 2.49 times less return on investment than Jiaozuo Wanfang. But when comparing it to its historical volatility, Baoshan Iron Steel is 1.51 times less risky than Jiaozuo Wanfang. It trades about 0.02 of its potential returns per unit of risk. Jiaozuo Wanfang Aluminum is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 565.00 in Jiaozuo Wanfang Aluminum on October 25, 2024 and sell it today you would earn a total of 149.00 from holding Jiaozuo Wanfang Aluminum or generate 26.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baoshan Iron Steel vs. Jiaozuo Wanfang Aluminum
Performance |
| Timeline |
| Baoshan Iron Steel |
| Jiaozuo Wanfang Aluminum |
Baoshan Iron and Jiaozuo Wanfang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baoshan Iron and Jiaozuo Wanfang
The main advantage of trading using opposite Baoshan Iron and Jiaozuo Wanfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Jiaozuo Wanfang 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 Jiaozuo Wanfang will offset losses from the drop in Jiaozuo Wanfang's long position.| Baoshan Iron vs. Tianjin Ruixin Technology | Baoshan Iron vs. Queclink Wireless Solutions | Baoshan Iron vs. Hubei Forbon Technology | Baoshan Iron vs. StarPower Semiconductor |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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