Correlation Between Baoshan Iron and Advanced Technology
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By analyzing existing cross correlation between Baoshan Iron Steel and Advanced Technology Materials, you can compare the effects of market volatilities on Baoshan Iron and Advanced Technology 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 Advanced Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Advanced Technology.
Diversification Opportunities for Baoshan Iron and Advanced Technology
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baoshan and Advanced is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Advanced Technology Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Technology 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 Advanced Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Technology has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Advanced Technology go up and down completely randomly.
Pair Corralation between Baoshan Iron and Advanced Technology
Assuming the 90 days trading horizon Baoshan Iron is expected to generate 7.85 times less return on investment than Advanced Technology. But when comparing it to its historical volatility, Baoshan Iron Steel is 2.89 times less risky than Advanced Technology. It trades about 0.05 of its potential returns per unit of risk. Advanced Technology Materials is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,085 in Advanced Technology Materials on September 1, 2024 and sell it today you would earn a total of 136.00 from holding Advanced Technology Materials or generate 12.53% 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. Advanced Technology Materials
Performance |
| Timeline |
| Baoshan Iron Steel |
| Advanced Technology |
Baoshan Iron and Advanced Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baoshan Iron and Advanced Technology
The main advantage of trading using opposite Baoshan Iron and Advanced Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Advanced Technology 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 Advanced Technology will offset losses from the drop in Advanced Technology's long position.| Baoshan Iron vs. Hubei Xingfa Chemicals | Baoshan Iron vs. Shanghai Jinfeng Wine | Baoshan Iron vs. Dazhong Transportation Group | Baoshan Iron vs. Sichuan Fulin Transportation |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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