Correlation Between Baoshan Iron and Luxi Chemical
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By analyzing existing cross correlation between Baoshan Iron Steel and Luxi Chemical Group, you can compare the effects of market volatilities on Baoshan Iron and Luxi 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 Luxi Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Luxi Chemical.
Diversification Opportunities for Baoshan Iron and Luxi Chemical
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Baoshan and Luxi is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Luxi Chemical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luxi Chemical Group 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 Luxi Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luxi Chemical Group has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Luxi Chemical go up and down completely randomly.
Pair Corralation between Baoshan Iron and Luxi Chemical
Assuming the 90 days trading horizon Baoshan Iron Steel is expected to generate 0.88 times more return on investment than Luxi Chemical. However, Baoshan Iron Steel is 1.14 times less risky than Luxi Chemical. It trades about 0.03 of its potential returns per unit of risk. Luxi Chemical Group is currently generating about 0.0 per unit of risk. If you would invest 571.00 in Baoshan Iron Steel on August 29, 2024 and sell it today you would earn a total of 89.00 from holding Baoshan Iron Steel or generate 15.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baoshan Iron Steel vs. Luxi Chemical Group
Performance |
| Timeline |
| Baoshan Iron Steel |
| Luxi Chemical Group |
Baoshan Iron and Luxi Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baoshan Iron and Luxi Chemical
The main advantage of trading using opposite Baoshan Iron and Luxi Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Luxi 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 Luxi Chemical will offset losses from the drop in Luxi Chemical's long position.| Baoshan Iron vs. Shandong Gold Mining | Baoshan Iron vs. Rongsheng Petrochemical Co | Baoshan Iron vs. Inner Mongolia BaoTou | Baoshan Iron vs. Jiangxi Ganfeng Lithium |
| Luxi Chemical vs. Nanjing Medlander Medical | Luxi Chemical vs. Allmed Medical Products | Luxi Chemical vs. Touchstone International Medical | Luxi Chemical vs. Xingguang Agricultural Mach |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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