Correlation Between Baoshan Iron and Zhejiang Zhengguang
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By analyzing existing cross correlation between Baoshan Iron Steel and Zhejiang Zhengguang Industrial, you can compare the effects of market volatilities on Baoshan Iron and Zhejiang Zhengguang 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 Zhejiang Zhengguang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Zhejiang Zhengguang.
Diversification Opportunities for Baoshan Iron and Zhejiang Zhengguang
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Baoshan and Zhejiang is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Zhejiang Zhengguang Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Zhengguang 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 Zhejiang Zhengguang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Zhengguang has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Zhejiang Zhengguang go up and down completely randomly.
Pair Corralation between Baoshan Iron and Zhejiang Zhengguang
Assuming the 90 days trading horizon Baoshan Iron is expected to generate 2.9 times less return on investment than Zhejiang Zhengguang. But when comparing it to its historical volatility, Baoshan Iron Steel is 2.09 times less risky than Zhejiang Zhengguang. It trades about 0.03 of its potential returns per unit of risk. Zhejiang Zhengguang Industrial is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,904 in Zhejiang Zhengguang Industrial on November 5, 2024 and sell it today you would earn a total of 413.00 from holding Zhejiang Zhengguang Industrial or generate 21.69% 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. Zhejiang Zhengguang Industrial
Performance |
| Timeline |
| Baoshan Iron Steel |
| Zhejiang Zhengguang |
Baoshan Iron and Zhejiang Zhengguang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baoshan Iron and Zhejiang Zhengguang
The main advantage of trading using opposite Baoshan Iron and Zhejiang Zhengguang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Zhejiang Zhengguang 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 Zhejiang Zhengguang will offset losses from the drop in Zhejiang Zhengguang's long position.| Baoshan Iron vs. Eyebright Medical Technology | Baoshan Iron vs. Hainan Mining Co | Baoshan Iron vs. Kontour Medical Technology | Baoshan Iron vs. Guocheng Mining Co |
| Zhejiang Zhengguang vs. Thunder Software Technology | Zhejiang Zhengguang vs. China National Software | Zhejiang Zhengguang vs. Linkage Software Co | Zhejiang Zhengguang vs. Beijing Seeyon Internet |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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