Correlation Between Baoshan Iron and Hunan Nanling
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By analyzing existing cross correlation between Baoshan Iron Steel and Hunan Nanling Industrial, you can compare the effects of market volatilities on Baoshan Iron and Hunan Nanling 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 Hunan Nanling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Hunan Nanling.
Diversification Opportunities for Baoshan Iron and Hunan Nanling
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baoshan and Hunan is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Hunan Nanling Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Nanling Industrial 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 Hunan Nanling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Nanling Industrial has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Hunan Nanling go up and down completely randomly.
Pair Corralation between Baoshan Iron and Hunan Nanling
Assuming the 90 days trading horizon Baoshan Iron Steel is expected to generate 0.67 times more return on investment than Hunan Nanling. However, Baoshan Iron Steel is 1.5 times less risky than Hunan Nanling. It trades about -0.05 of its potential returns per unit of risk. Hunan Nanling Industrial is currently generating about -0.14 per unit of risk. If you would invest 677.00 in Baoshan Iron Steel on August 30, 2024 and sell it today you would lose (15.00) from holding Baoshan Iron Steel or give up 2.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baoshan Iron Steel vs. Hunan Nanling Industrial
Performance |
| Timeline |
| Baoshan Iron Steel |
| Hunan Nanling Industrial |
Baoshan Iron and Hunan Nanling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baoshan Iron and Hunan Nanling
The main advantage of trading using opposite Baoshan Iron and Hunan Nanling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Hunan Nanling 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 Hunan Nanling will offset losses from the drop in Hunan Nanling's long position.| Baoshan Iron vs. Wanhua Chemical Group | Baoshan Iron vs. Rongsheng Petrochemical Co | Baoshan Iron vs. Hoshine Silicon Ind |
| Hunan Nanling vs. DO Home Collection | Hunan Nanling vs. Guangzhou Ruoyuchen Information | Hunan Nanling vs. UE Furniture Co | Hunan Nanling vs. Qumei Furniture Group |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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