Correlation Between Baoshan Iron and Elite Color
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By analyzing existing cross correlation between Baoshan Iron Steel and Elite Color Environmental, you can compare the effects of market volatilities on Baoshan Iron and Elite Color 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 Elite Color. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Elite Color.
Diversification Opportunities for Baoshan Iron and Elite Color
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baoshan and Elite is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Elite Color Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elite Color Environmental 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 Elite Color. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elite Color Environmental has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Elite Color go up and down completely randomly.
Pair Corralation between Baoshan Iron and Elite Color
Assuming the 90 days trading horizon Baoshan Iron Steel is expected to under-perform the Elite Color. But the stock apears to be less risky and, when comparing its historical volatility, Baoshan Iron Steel is 1.21 times less risky than Elite Color. The stock trades about -0.05 of its potential returns per unit of risk. The Elite Color Environmental is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 605.00 in Elite Color Environmental on August 29, 2024 and sell it today you would earn a total of 83.00 from holding Elite Color Environmental or generate 13.72% 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. Elite Color Environmental
Performance |
| Timeline |
| Baoshan Iron Steel |
| Elite Color Environmental |
Baoshan Iron and Elite Color Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baoshan Iron and Elite Color
The main advantage of trading using opposite Baoshan Iron and Elite Color positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Elite Color 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 Elite Color will offset losses from the drop in Elite Color's long position.| Baoshan Iron vs. Shandong Gold Mining | Baoshan Iron vs. Rongsheng Petrochemical Co | Baoshan Iron vs. Inner Mongolia BaoTou | Baoshan Iron vs. Jiangxi Ganfeng Lithium |
| Elite Color vs. Baoshan Iron Steel | Elite Color vs. Shandong Gold Mining | Elite Color vs. Rongsheng Petrochemical Co | Elite Color vs. Inner Mongolia BaoTou |
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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