Correlation Between Baoshan Iron and Renxin New
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By analyzing existing cross correlation between Baoshan Iron Steel and Renxin New Material, you can compare the effects of market volatilities on Baoshan Iron and Renxin New 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 Renxin New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Renxin New.
Diversification Opportunities for Baoshan Iron and Renxin New
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Baoshan and Renxin is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Renxin New Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renxin New Material 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 Renxin New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renxin New Material has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Renxin New go up and down completely randomly.
Pair Corralation between Baoshan Iron and Renxin New
Assuming the 90 days trading horizon Baoshan Iron is expected to generate 2.6 times less return on investment than Renxin New. But when comparing it to its historical volatility, Baoshan Iron Steel is 1.38 times less risky than Renxin New. It trades about 0.04 of its potential returns per unit of risk. Renxin New Material is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 926.00 in Renxin New Material on November 3, 2024 and sell it today you would earn a total of 212.00 from holding Renxin New Material or generate 22.89% 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. Renxin New Material
Performance |
| Timeline |
| Baoshan Iron Steel |
| Renxin New Material |
Baoshan Iron and Renxin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baoshan Iron and Renxin New
The main advantage of trading using opposite Baoshan Iron and Renxin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Renxin New 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 Renxin New will offset losses from the drop in Renxin New's long position.| Baoshan Iron vs. Zijin Mining Group | Baoshan Iron vs. Wanhua Chemical Group | Baoshan Iron vs. Shandong Gold Mining | Baoshan Iron vs. Rongsheng Petrochemical Co |
| Renxin New vs. Glodon Software Co | Renxin New vs. Hangzhou Pinming Software | Renxin New vs. Peoples Insurance of | Renxin New vs. Industrial Bank Co |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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