Correlation Between Baoshan Iron and Xinxiang Chemical
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By analyzing existing cross correlation between Baoshan Iron Steel and Xinxiang Chemical Fiber, you can compare the effects of market volatilities on Baoshan Iron and Xinxiang 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 Xinxiang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Xinxiang Chemical.
Diversification Opportunities for Baoshan Iron and Xinxiang Chemical
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baoshan and Xinxiang is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Xinxiang Chemical Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinxiang Chemical Fiber 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 Xinxiang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinxiang Chemical Fiber has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Xinxiang Chemical go up and down completely randomly.
Pair Corralation between Baoshan Iron and Xinxiang Chemical
Assuming the 90 days trading horizon Baoshan Iron is expected to generate 6.55 times less return on investment than Xinxiang Chemical. But when comparing it to its historical volatility, Baoshan Iron Steel is 3.67 times less risky than Xinxiang Chemical. It trades about 0.11 of its potential returns per unit of risk. Xinxiang Chemical Fiber is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 378.00 in Xinxiang Chemical Fiber on September 15, 2024 and sell it today you would earn a total of 76.00 from holding Xinxiang Chemical Fiber or generate 20.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baoshan Iron Steel vs. Xinxiang Chemical Fiber
Performance |
| Timeline |
| Baoshan Iron Steel |
| Xinxiang Chemical Fiber |
Baoshan Iron and Xinxiang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baoshan Iron and Xinxiang Chemical
The main advantage of trading using opposite Baoshan Iron and Xinxiang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Xinxiang 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 Xinxiang Chemical will offset losses from the drop in Xinxiang Chemical's long position.| Baoshan Iron vs. Chongqing Sulian Plastic | Baoshan Iron vs. Shantou Wanshun Package | Baoshan Iron vs. Muyuan Foodstuff Co | Baoshan Iron vs. Anji Foodstuff Co |
| Xinxiang Chemical vs. Zijin Mining Group | Xinxiang Chemical vs. Wanhua Chemical Group | Xinxiang Chemical vs. Baoshan Iron Steel | Xinxiang Chemical vs. Shandong Gold Mining |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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