Correlation Between Baoshan Iron and Jiamei Food
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By analyzing existing cross correlation between Baoshan Iron Steel and Jiamei Food Packaging, you can compare the effects of market volatilities on Baoshan Iron and Jiamei Food 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 Jiamei Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Jiamei Food.
Diversification Opportunities for Baoshan Iron and Jiamei Food
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baoshan and Jiamei is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Jiamei Food Packaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiamei Food Packaging 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 Jiamei Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiamei Food Packaging has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Jiamei Food go up and down completely randomly.
Pair Corralation between Baoshan Iron and Jiamei Food
Assuming the 90 days trading horizon Baoshan Iron is expected to generate 6.91 times less return on investment than Jiamei Food. But when comparing it to its historical volatility, Baoshan Iron Steel is 1.08 times less risky than Jiamei Food. It trades about 0.03 of its potential returns per unit of risk. Jiamei Food Packaging is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 314.00 in Jiamei Food Packaging on August 31, 2024 and sell it today you would earn a total of 25.00 from holding Jiamei Food Packaging or generate 7.96% 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. Jiamei Food Packaging
Performance |
| Timeline |
| Baoshan Iron Steel |
| Jiamei Food Packaging |
Baoshan Iron and Jiamei Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baoshan Iron and Jiamei Food
The main advantage of trading using opposite Baoshan Iron and Jiamei Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Jiamei Food 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 Jiamei Food will offset losses from the drop in Jiamei Food's long position.| Baoshan Iron vs. Zijin Mining Group | Baoshan Iron vs. Rongsheng Petrochemical Co | Baoshan Iron vs. Hoshine Silicon Ind |
| Jiamei Food vs. Zijin Mining Group | Jiamei Food vs. Baoshan Iron Steel | Jiamei Food vs. Rongsheng Petrochemical Co | Jiamei Food vs. Hoshine Silicon Ind |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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