Correlation Between Baoshan Iron and Zhuzhou Feilu
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By analyzing existing cross correlation between Baoshan Iron Steel and Zhuzhou Feilu High Tech, you can compare the effects of market volatilities on Baoshan Iron and Zhuzhou Feilu 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 Zhuzhou Feilu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Zhuzhou Feilu.
Diversification Opportunities for Baoshan Iron and Zhuzhou Feilu
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baoshan and Zhuzhou is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Zhuzhou Feilu High Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhuzhou Feilu High 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 Zhuzhou Feilu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhuzhou Feilu High has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Zhuzhou Feilu go up and down completely randomly.
Pair Corralation between Baoshan Iron and Zhuzhou Feilu
Assuming the 90 days trading horizon Baoshan Iron is expected to generate 3.63 times less return on investment than Zhuzhou Feilu. But when comparing it to its historical volatility, Baoshan Iron Steel is 1.88 times less risky than Zhuzhou Feilu. It trades about 0.03 of its potential returns per unit of risk. Zhuzhou Feilu High Tech is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 680.00 in Zhuzhou Feilu High Tech on August 31, 2024 and sell it today you would earn a total of 24.00 from holding Zhuzhou Feilu High Tech or generate 3.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Baoshan Iron Steel vs. Zhuzhou Feilu High Tech
Performance |
| Timeline |
| Baoshan Iron Steel |
| Zhuzhou Feilu High |
Baoshan Iron and Zhuzhou Feilu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baoshan Iron and Zhuzhou Feilu
The main advantage of trading using opposite Baoshan Iron and Zhuzhou Feilu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Zhuzhou Feilu 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 Zhuzhou Feilu will offset losses from the drop in Zhuzhou Feilu's long position.The idea behind Baoshan Iron Steel and Zhuzhou Feilu High Tech pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Zhuzhou Feilu vs. Southchip Semiconductor Technology | Zhuzhou Feilu vs. Heren Health Co | Zhuzhou Feilu vs. Shandong Longquan Pipeline | Zhuzhou Feilu vs. XinJiang GuoTong Pipeline |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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