Correlation Between Baoshan Iron and Shanghai Yaohua
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By analyzing existing cross correlation between Baoshan Iron Steel and Shanghai Yaohua Pilkington, you can compare the effects of market volatilities on Baoshan Iron and Shanghai Yaohua 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 Shanghai Yaohua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Shanghai Yaohua.
Diversification Opportunities for Baoshan Iron and Shanghai Yaohua
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baoshan and Shanghai is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Shanghai Yaohua Pilkington in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Yaohua Pilk 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 Shanghai Yaohua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Yaohua Pilk has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Shanghai Yaohua go up and down completely randomly.
Pair Corralation between Baoshan Iron and Shanghai Yaohua
Assuming the 90 days trading horizon Baoshan Iron Steel is expected to under-perform the Shanghai Yaohua. But the stock apears to be less risky and, when comparing its historical volatility, Baoshan Iron Steel is 2.17 times less risky than Shanghai Yaohua. The stock trades about -0.06 of its potential returns per unit of risk. The Shanghai Yaohua Pilkington is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 34.00 in Shanghai Yaohua Pilkington on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Shanghai Yaohua Pilkington or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baoshan Iron Steel vs. Shanghai Yaohua Pilkington
Performance |
| Timeline |
| Baoshan Iron Steel |
| Shanghai Yaohua Pilk |
Baoshan Iron and Shanghai Yaohua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baoshan Iron and Shanghai Yaohua
The main advantage of trading using opposite Baoshan Iron and Shanghai Yaohua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Shanghai Yaohua 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 Shanghai Yaohua will offset losses from the drop in Shanghai Yaohua's long position.| Baoshan Iron vs. Zijin Mining Group | Baoshan Iron vs. Wanhua Chemical Group | Baoshan Iron vs. Rongsheng Petrochemical Co | Baoshan Iron vs. Hoshine Silicon Ind |
| Shanghai Yaohua vs. Zijin Mining Group | Shanghai Yaohua vs. Wanhua Chemical Group | Shanghai Yaohua vs. Baoshan Iron Steel | Shanghai Yaohua 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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