Correlation Between Baoshan Iron and Hengli Petrochemical
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By analyzing existing cross correlation between Baoshan Iron Steel and Hengli Petrochemical Co, you can compare the effects of market volatilities on Baoshan Iron and Hengli Petrochemical 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 Hengli Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Hengli Petrochemical.
Diversification Opportunities for Baoshan Iron and Hengli Petrochemical
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Baoshan and Hengli is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Hengli Petrochemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengli Petrochemical 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 Hengli Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengli Petrochemical has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Hengli Petrochemical go up and down completely randomly.
Pair Corralation between Baoshan Iron and Hengli Petrochemical
Assuming the 90 days trading horizon Baoshan Iron Steel is expected to under-perform the Hengli Petrochemical. In addition to that, Baoshan Iron is 1.0 times more volatile than Hengli Petrochemical Co. It trades about -0.01 of its total potential returns per unit of risk. Hengli Petrochemical Co is currently generating about 0.04 per unit of volatility. If you would invest 1,361 in Hengli Petrochemical Co on October 26, 2024 and sell it today you would earn a total of 101.00 from holding Hengli Petrochemical Co or generate 7.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baoshan Iron Steel vs. Hengli Petrochemical Co
Performance |
| Timeline |
| Baoshan Iron Steel |
| Hengli Petrochemical |
Baoshan Iron and Hengli Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baoshan Iron and Hengli Petrochemical
The main advantage of trading using opposite Baoshan Iron and Hengli Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Hengli Petrochemical 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 Hengli Petrochemical will offset losses from the drop in Hengli Petrochemical's long position.| Baoshan Iron vs. Tianjin Ruixin Technology | Baoshan Iron vs. Queclink Wireless Solutions | Baoshan Iron vs. Hubei Forbon Technology | Baoshan Iron vs. StarPower Semiconductor |
| Hengli Petrochemical vs. Zijin Mining Group | Hengli Petrochemical vs. Wanhua Chemical Group | Hengli Petrochemical vs. Baoshan Iron Steel | Hengli Petrochemical vs. Shandong Gold Mining |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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