Correlation Between Baoshan Iron and Shenzhen Noposion
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By analyzing existing cross correlation between Baoshan Iron Steel and Shenzhen Noposion Agrochemicals, you can compare the effects of market volatilities on Baoshan Iron and Shenzhen Noposion 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 Shenzhen Noposion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Shenzhen Noposion.
Diversification Opportunities for Baoshan Iron and Shenzhen Noposion
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baoshan and Shenzhen is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Shenzhen Noposion Agrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Noposion 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 Shenzhen Noposion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Noposion has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Shenzhen Noposion go up and down completely randomly.
Pair Corralation between Baoshan Iron and Shenzhen Noposion
Assuming the 90 days trading horizon Baoshan Iron Steel is expected to under-perform the Shenzhen Noposion. But the stock apears to be less risky and, when comparing its historical volatility, Baoshan Iron Steel is 1.52 times less risky than Shenzhen Noposion. The stock trades about -0.15 of its potential returns per unit of risk. The Shenzhen Noposion Agrochemicals is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 961.00 in Shenzhen Noposion Agrochemicals on August 29, 2024 and sell it today you would lose (15.00) from holding Shenzhen Noposion Agrochemicals or give up 1.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baoshan Iron Steel vs. Shenzhen Noposion Agrochemical
Performance |
| Timeline |
| Baoshan Iron Steel |
| Shenzhen Noposion |
Baoshan Iron and Shenzhen Noposion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baoshan Iron and Shenzhen Noposion
The main advantage of trading using opposite Baoshan Iron and Shenzhen Noposion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Shenzhen Noposion 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 Shenzhen Noposion will offset losses from the drop in Shenzhen Noposion'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 |
| Shenzhen Noposion vs. Baoshan Iron Steel | Shenzhen Noposion vs. Shandong Gold Mining | Shenzhen Noposion vs. Rongsheng Petrochemical Co | Shenzhen Noposion vs. Inner Mongolia BaoTou |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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