Correlation Between Baoshan Iron and Jiangxi Ganfeng
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By analyzing existing cross correlation between Baoshan Iron Steel and Jiangxi Ganfeng Lithium, you can compare the effects of market volatilities on Baoshan Iron and Jiangxi Ganfeng 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 Jiangxi Ganfeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Jiangxi Ganfeng.
Diversification Opportunities for Baoshan Iron and Jiangxi Ganfeng
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baoshan and Jiangxi is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Jiangxi Ganfeng Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Ganfeng Lithium 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 Jiangxi Ganfeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Ganfeng Lithium has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Jiangxi Ganfeng go up and down completely randomly.
Pair Corralation between Baoshan Iron and Jiangxi Ganfeng
Assuming the 90 days trading horizon Baoshan Iron is expected to generate 12.92 times less return on investment than Jiangxi Ganfeng. But when comparing it to its historical volatility, Baoshan Iron Steel is 2.46 times less risky than Jiangxi Ganfeng. It trades about 0.05 of its potential returns per unit of risk. Jiangxi Ganfeng Lithium is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 3,315 in Jiangxi Ganfeng Lithium on August 24, 2024 and sell it today you would earn a total of 964.00 from holding Jiangxi Ganfeng Lithium or generate 29.08% 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. Jiangxi Ganfeng Lithium
Performance |
| Timeline |
| Baoshan Iron Steel |
| Jiangxi Ganfeng Lithium |
Baoshan Iron and Jiangxi Ganfeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baoshan Iron and Jiangxi Ganfeng
The main advantage of trading using opposite Baoshan Iron and Jiangxi Ganfeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Jiangxi Ganfeng 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 Jiangxi Ganfeng will offset losses from the drop in Jiangxi Ganfeng's long position.| Baoshan Iron vs. Shandong Gold Mining | Baoshan Iron vs. Inner Mongolia BaoTou | Baoshan Iron vs. Jiangxi Ganfeng Lithium | Baoshan Iron vs. Yunnan Aluminium Co |
| Jiangxi Ganfeng vs. Everdisplay Optronics Shanghai | Jiangxi Ganfeng vs. Easyhome New Retail | Jiangxi Ganfeng vs. Hubei Geoway Investment | Jiangxi Ganfeng vs. Tieling Newcity Investment |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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