Correlation Between Baoshan Iron and Guangdong Tianhe
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By analyzing existing cross correlation between Baoshan Iron Steel and Guangdong Tianhe Agricultural, you can compare the effects of market volatilities on Baoshan Iron and Guangdong Tianhe 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 Guangdong Tianhe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Guangdong Tianhe.
Diversification Opportunities for Baoshan Iron and Guangdong Tianhe
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Baoshan and Guangdong is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Guangdong Tianhe Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Tianhe Agr 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 Guangdong Tianhe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Tianhe Agr has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Guangdong Tianhe go up and down completely randomly.
Pair Corralation between Baoshan Iron and Guangdong Tianhe
Assuming the 90 days trading horizon Baoshan Iron Steel is expected to under-perform the Guangdong Tianhe. But the stock apears to be less risky and, when comparing its historical volatility, Baoshan Iron Steel is 2.01 times less risky than Guangdong Tianhe. The stock trades about -0.05 of its potential returns per unit of risk. The Guangdong Tianhe Agricultural is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 561.00 in Guangdong Tianhe Agricultural on October 14, 2024 and sell it today you would earn a total of 4.00 from holding Guangdong Tianhe Agricultural or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baoshan Iron Steel vs. Guangdong Tianhe Agricultural
Performance |
| Timeline |
| Baoshan Iron Steel |
| Guangdong Tianhe Agr |
Baoshan Iron and Guangdong Tianhe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baoshan Iron and Guangdong Tianhe
The main advantage of trading using opposite Baoshan Iron and Guangdong Tianhe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Guangdong Tianhe 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 Guangdong Tianhe will offset losses from the drop in Guangdong Tianhe's long position.| Baoshan Iron vs. Dalian Thermal Power | Baoshan Iron vs. Uroica Mining Safety | Baoshan Iron vs. Zhongshan Public Utilities | Baoshan Iron vs. Rising Nonferrous Metals |
| Guangdong Tianhe vs. Penyao Environmental Protection | Guangdong Tianhe vs. GreenTech Environmental Co | Guangdong Tianhe vs. Zoy Home Furnishing | Guangdong Tianhe vs. Fujian Nanwang Environment |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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