Correlation Between Baoshan Iron and Sichuan Jinshi
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By analyzing existing cross correlation between Baoshan Iron Steel and Sichuan Jinshi Technology, you can compare the effects of market volatilities on Baoshan Iron and Sichuan Jinshi 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 Sichuan Jinshi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Sichuan Jinshi.
Diversification Opportunities for Baoshan Iron and Sichuan Jinshi
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baoshan and Sichuan is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Sichuan Jinshi Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Jinshi Technology 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 Sichuan Jinshi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Jinshi Technology has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Sichuan Jinshi go up and down completely randomly.
Pair Corralation between Baoshan Iron and Sichuan Jinshi
Assuming the 90 days trading horizon Baoshan Iron Steel is expected to under-perform the Sichuan Jinshi. But the stock apears to be less risky and, when comparing its historical volatility, Baoshan Iron Steel is 1.5 times less risky than Sichuan Jinshi. The stock trades about -0.01 of its potential returns per unit of risk. The Sichuan Jinshi Technology is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 513.00 in Sichuan Jinshi Technology on September 18, 2024 and sell it today you would earn a total of 235.00 from holding Sichuan Jinshi Technology or generate 45.81% 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. Sichuan Jinshi Technology
Performance |
| Timeline |
| Baoshan Iron Steel |
| Sichuan Jinshi Technology |
Baoshan Iron and Sichuan Jinshi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baoshan Iron and Sichuan Jinshi
The main advantage of trading using opposite Baoshan Iron and Sichuan Jinshi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Sichuan Jinshi 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 Sichuan Jinshi will offset losses from the drop in Sichuan Jinshi's long position.| Baoshan Iron vs. Zijin Mining Group | Baoshan Iron vs. Wanhua Chemical Group | Baoshan Iron vs. Shandong Gold Mining | Baoshan Iron vs. Rongsheng Petrochemical Co |
| Sichuan Jinshi vs. Zijin Mining Group | Sichuan Jinshi vs. Wanhua Chemical Group | Sichuan Jinshi vs. Baoshan Iron Steel | Sichuan Jinshi 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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