Correlation Between Baoshan Iron and Pengxin International
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By analyzing existing cross correlation between Baoshan Iron Steel and Pengxin International Mining, you can compare the effects of market volatilities on Baoshan Iron and Pengxin International 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 Pengxin International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Pengxin International.
Diversification Opportunities for Baoshan Iron and Pengxin International
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baoshan and Pengxin is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Pengxin International Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pengxin International 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 Pengxin International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pengxin International has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Pengxin International go up and down completely randomly.
Pair Corralation between Baoshan Iron and Pengxin International
Assuming the 90 days trading horizon Baoshan Iron Steel is expected to under-perform the Pengxin International. But the stock apears to be less risky and, when comparing its historical volatility, Baoshan Iron Steel is 1.93 times less risky than Pengxin International. The stock trades about -0.15 of its potential returns per unit of risk. The Pengxin International Mining is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 321.00 in Pengxin International Mining on August 29, 2024 and sell it today you would lose (1.00) from holding Pengxin International Mining or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baoshan Iron Steel vs. Pengxin International Mining
Performance |
| Timeline |
| Baoshan Iron Steel |
| Pengxin International |
Baoshan Iron and Pengxin International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baoshan Iron and Pengxin International
The main advantage of trading using opposite Baoshan Iron and Pengxin International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Pengxin International 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 Pengxin International will offset losses from the drop in Pengxin International's long position.| Baoshan Iron vs. Wanhua Chemical Group | Baoshan Iron vs. Shandong Gold Mining | Baoshan Iron vs. Rongsheng Petrochemical Co | Baoshan Iron vs. Inner Mongolia BaoTou |
| Pengxin International vs. Wanhua Chemical Group | Pengxin International vs. Shandong Gold Mining | Pengxin International vs. Rongsheng Petrochemical Co | Pengxin International vs. Inner Mongolia BaoTou |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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