Correlation Between Baoshan Iron and Shenyang Chemical
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By analyzing existing cross correlation between Baoshan Iron Steel and Shenyang Chemical Industry, you can compare the effects of market volatilities on Baoshan Iron and Shenyang Chemical 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 Shenyang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Shenyang Chemical.
Diversification Opportunities for Baoshan Iron and Shenyang Chemical
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Baoshan and Shenyang is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Shenyang Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenyang 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 Shenyang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenyang Chemical has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Shenyang Chemical go up and down completely randomly.
Pair Corralation between Baoshan Iron and Shenyang Chemical
Assuming the 90 days trading horizon Baoshan Iron Steel is expected to generate 0.65 times more return on investment than Shenyang Chemical. However, Baoshan Iron Steel is 1.55 times less risky than Shenyang Chemical. It trades about 0.03 of its potential returns per unit of risk. Shenyang Chemical Industry is currently generating about -0.02 per unit of risk. If you would invest 612.00 in Baoshan Iron Steel on November 5, 2024 and sell it today you would earn a total of 89.00 from holding Baoshan Iron Steel or generate 14.54% 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. Shenyang Chemical Industry
Performance |
| Timeline |
| Baoshan Iron Steel |
| Shenyang Chemical |
Baoshan Iron and Shenyang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baoshan Iron and Shenyang Chemical
The main advantage of trading using opposite Baoshan Iron and Shenyang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Shenyang Chemical 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 Shenyang Chemical will offset losses from the drop in Shenyang Chemical's long position.| Baoshan Iron vs. Eyebright Medical Technology | Baoshan Iron vs. Hainan Mining Co | Baoshan Iron vs. Kontour Medical Technology | Baoshan Iron vs. Guocheng Mining Co |
| Shenyang Chemical vs. Juneyao Airlines | Shenyang Chemical vs. Sinocat Environmental Technology | Shenyang Chemical vs. Baoshan Iron Steel | Shenyang Chemical vs. China Publishing Media |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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