Correlation Between Baoshan Iron and Dalian Thermal
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By analyzing existing cross correlation between Baoshan Iron Steel and Dalian Thermal Power, you can compare the effects of market volatilities on Baoshan Iron and Dalian Thermal 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 Dalian Thermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Dalian Thermal.
Diversification Opportunities for Baoshan Iron and Dalian Thermal
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Baoshan and Dalian is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Dalian Thermal Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalian Thermal Power 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 Dalian Thermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalian Thermal Power has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Dalian Thermal go up and down completely randomly.
Pair Corralation between Baoshan Iron and Dalian Thermal
Assuming the 90 days trading horizon Baoshan Iron Steel is expected to generate 0.47 times more return on investment than Dalian Thermal. However, Baoshan Iron Steel is 2.12 times less risky than Dalian Thermal. It trades about 0.04 of its potential returns per unit of risk. Dalian Thermal Power is currently generating about -0.12 per unit of risk. If you would invest 679.00 in Baoshan Iron Steel on November 6, 2024 and sell it today you would earn a total of 22.00 from holding Baoshan Iron Steel or generate 3.24% 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. Dalian Thermal Power
Performance |
| Timeline |
| Baoshan Iron Steel |
| Dalian Thermal Power |
Baoshan Iron and Dalian Thermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baoshan Iron and Dalian Thermal
The main advantage of trading using opposite Baoshan Iron and Dalian Thermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Dalian Thermal 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 Dalian Thermal will offset losses from the drop in Dalian Thermal's long position.| Baoshan Iron vs. Cabio Biotech Wuhan | Baoshan Iron vs. Zhengping RoadBridge Constr | Baoshan Iron vs. HanS Laser Tech | Baoshan Iron vs. Jiangsu Broadcasting Cable |
| Dalian Thermal vs. Shuhua Sports Co | Dalian Thermal vs. Hengdian Entertainment Co | Dalian Thermal vs. Quectel Wireless Solutions | Dalian Thermal vs. Guangzhou Jinyi Media |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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