Correlation Between Baoshan Iron and JCHX Mining
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By analyzing existing cross correlation between Baoshan Iron Steel and JCHX Mining Management, you can compare the effects of market volatilities on Baoshan Iron and JCHX 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 JCHX Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and JCHX Mining.
Diversification Opportunities for Baoshan Iron and JCHX Mining
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Baoshan and JCHX is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and JCHX Mining Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JCHX Mining Management 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 JCHX Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JCHX Mining Management has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and JCHX Mining go up and down completely randomly.
Pair Corralation between Baoshan Iron and JCHX Mining
Assuming the 90 days trading horizon Baoshan Iron Steel is expected to under-perform the JCHX Mining. But the stock apears to be less risky and, when comparing its historical volatility, Baoshan Iron Steel is 1.51 times less risky than JCHX Mining. The stock trades about -0.14 of its potential returns per unit of risk. The JCHX Mining Management is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 4,089 in JCHX Mining Management on August 28, 2024 and sell it today you would lose (80.00) from holding JCHX Mining Management or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baoshan Iron Steel vs. JCHX Mining Management
Performance |
| Timeline |
| Baoshan Iron Steel |
| JCHX Mining Management |
Baoshan Iron and JCHX Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baoshan Iron and JCHX Mining
The main advantage of trading using opposite Baoshan Iron and JCHX Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, JCHX 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 JCHX Mining will offset losses from the drop in JCHX Mining'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 |
| JCHX Mining vs. Zijin Mining Group | JCHX Mining vs. Wanhua Chemical Group | JCHX Mining vs. Baoshan Iron Steel | JCHX Mining 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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