Correlation Between Baoshan Iron and Jiangxi Hengda
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By analyzing existing cross correlation between Baoshan Iron Steel and Jiangxi Hengda Hi Tech, you can compare the effects of market volatilities on Baoshan Iron and Jiangxi Hengda 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 Hengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Jiangxi Hengda.
Diversification Opportunities for Baoshan Iron and Jiangxi Hengda
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Baoshan and Jiangxi is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Jiangxi Hengda Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Hengda Hi 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 Hengda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Hengda Hi has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Jiangxi Hengda go up and down completely randomly.
Pair Corralation between Baoshan Iron and Jiangxi Hengda
Assuming the 90 days trading horizon Baoshan Iron Steel is expected to generate 0.53 times more return on investment than Jiangxi Hengda. However, Baoshan Iron Steel is 1.9 times less risky than Jiangxi Hengda. It trades about 0.02 of its potential returns per unit of risk. Jiangxi Hengda Hi Tech is currently generating about -0.01 per unit of risk. If you would invest 601.00 in Baoshan Iron Steel on October 25, 2024 and sell it today you would earn a total of 55.00 from holding Baoshan Iron Steel or generate 9.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baoshan Iron Steel vs. Jiangxi Hengda Hi Tech
Performance |
| Timeline |
| Baoshan Iron Steel |
| Jiangxi Hengda Hi |
Baoshan Iron and Jiangxi Hengda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baoshan Iron and Jiangxi Hengda
The main advantage of trading using opposite Baoshan Iron and Jiangxi Hengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Jiangxi Hengda 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 Hengda will offset losses from the drop in Jiangxi Hengda's long position.| Baoshan Iron vs. Tianjin Ruixin Technology | Baoshan Iron vs. Queclink Wireless Solutions | Baoshan Iron vs. Hubei Forbon Technology | Baoshan Iron vs. StarPower Semiconductor |
| Jiangxi Hengda vs. Ye Chiu Metal | Jiangxi Hengda vs. CITIC Metal Co | Jiangxi Hengda vs. Maccura Biotechnology Co | Jiangxi Hengda vs. Chongqing Shunbo Aluminum |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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