Correlation Between Baoshan Iron and Do-Fluoride Chemicals
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By analyzing existing cross correlation between Baoshan Iron Steel and Do Fluoride Chemicals Co, you can compare the effects of market volatilities on Baoshan Iron and Do-Fluoride Chemicals 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 Do-Fluoride Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Do-Fluoride Chemicals.
Diversification Opportunities for Baoshan Iron and Do-Fluoride Chemicals
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baoshan and Do-Fluoride is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Do Fluoride Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Do Fluoride Chemicals 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 Do-Fluoride Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Do Fluoride Chemicals has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Do-Fluoride Chemicals go up and down completely randomly.
Pair Corralation between Baoshan Iron and Do-Fluoride Chemicals
Assuming the 90 days trading horizon Baoshan Iron is expected to generate 5.67 times less return on investment than Do-Fluoride Chemicals. But when comparing it to its historical volatility, Baoshan Iron Steel is 2.36 times less risky than Do-Fluoride Chemicals. It trades about 0.05 of its potential returns per unit of risk. Do Fluoride Chemicals Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,215 in Do Fluoride Chemicals Co on September 1, 2024 and sell it today you would earn a total of 110.00 from holding Do Fluoride Chemicals Co or generate 9.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baoshan Iron Steel vs. Do Fluoride Chemicals Co
Performance |
| Timeline |
| Baoshan Iron Steel |
| Do Fluoride Chemicals |
Baoshan Iron and Do-Fluoride Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baoshan Iron and Do-Fluoride Chemicals
The main advantage of trading using opposite Baoshan Iron and Do-Fluoride Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Do-Fluoride Chemicals 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 Do-Fluoride Chemicals will offset losses from the drop in Do-Fluoride Chemicals' 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 |
| Do-Fluoride Chemicals vs. Zijin Mining Group | Do-Fluoride Chemicals vs. Wanhua Chemical Group | Do-Fluoride Chemicals vs. Baoshan Iron Steel | Do-Fluoride Chemicals 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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