Correlation Between Baoshan Iron and Chengtun Mining
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By analyzing existing cross correlation between Baoshan Iron Steel and Chengtun Mining Group, you can compare the effects of market volatilities on Baoshan Iron and Chengtun Mining 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 Chengtun Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Chengtun Mining.
Diversification Opportunities for Baoshan Iron and Chengtun Mining
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baoshan and Chengtun is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Chengtun Mining Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengtun Mining Group 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 Chengtun Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengtun Mining Group has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Chengtun Mining go up and down completely randomly.
Pair Corralation between Baoshan Iron and Chengtun Mining
Assuming the 90 days trading horizon Baoshan Iron Steel is expected to under-perform the Chengtun Mining. But the stock apears to be less risky and, when comparing its historical volatility, Baoshan Iron Steel is 1.4 times less risky than Chengtun Mining. The stock trades about -0.24 of its potential returns per unit of risk. The Chengtun Mining Group is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 470.00 in Chengtun Mining Group on October 25, 2024 and sell it today you would earn a total of 60.00 from holding Chengtun Mining Group or generate 12.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baoshan Iron Steel vs. Chengtun Mining Group
Performance |
| Timeline |
| Baoshan Iron Steel |
| Chengtun Mining Group |
Baoshan Iron and Chengtun Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baoshan Iron and Chengtun Mining
The main advantage of trading using opposite Baoshan Iron and Chengtun Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Chengtun Mining 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 Chengtun Mining will offset losses from the drop in Chengtun Mining's long position.| Baoshan Iron vs. Zijin Mining Group | Baoshan Iron vs. Wanhua Chemical Group | Baoshan Iron vs. Rongsheng Petrochemical Co | Baoshan Iron vs. Inner Mongolia BaoTou |
| Chengtun Mining vs. Zijin Mining Group | Chengtun Mining vs. Wanhua Chemical Group | Chengtun Mining vs. Baoshan Iron Steel | Chengtun Mining vs. Rongsheng Petrochemical 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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