Correlation Between Hubei Xingfa and Baoshan Iron
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By analyzing existing cross correlation between Hubei Xingfa Chemicals and Baoshan Iron Steel, you can compare the effects of market volatilities on Hubei Xingfa and Baoshan Iron 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 Hubei Xingfa with a short position of Baoshan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Xingfa and Baoshan Iron.
Diversification Opportunities for Hubei Xingfa and Baoshan Iron
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hubei and Baoshan is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Xingfa Chemicals and Baoshan Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baoshan Iron Steel and Hubei Xingfa 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 Hubei Xingfa Chemicals are associated (or correlated) with Baoshan Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baoshan Iron Steel has no effect on the direction of Hubei Xingfa i.e., Hubei Xingfa and Baoshan Iron go up and down completely randomly.
Pair Corralation between Hubei Xingfa and Baoshan Iron
Assuming the 90 days trading horizon Hubei Xingfa Chemicals is expected to under-perform the Baoshan Iron. In addition to that, Hubei Xingfa is 1.68 times more volatile than Baoshan Iron Steel. It trades about -0.05 of its total potential returns per unit of risk. Baoshan Iron Steel is currently generating about -0.03 per unit of volatility. If you would invest 669.00 in Baoshan Iron Steel on September 3, 2024 and sell it today you would lose (7.00) from holding Baoshan Iron Steel or give up 1.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Xingfa Chemicals vs. Baoshan Iron Steel
Performance |
| Timeline |
| Hubei Xingfa Chemicals |
| Baoshan Iron Steel |
Hubei Xingfa and Baoshan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Xingfa and Baoshan Iron
The main advantage of trading using opposite Hubei Xingfa and Baoshan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Xingfa position performs unexpectedly, Baoshan Iron 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 Baoshan Iron will offset losses from the drop in Baoshan Iron's long position.| Hubei Xingfa vs. Pengxin International Mining | Hubei Xingfa vs. Chengtun Mining Group | Hubei Xingfa vs. Eastroc Beverage Group | Hubei Xingfa vs. Guilin Seamild Foods |
| Baoshan Iron vs. Zijin Mining Group | Baoshan Iron vs. Rongsheng Petrochemical Co | Baoshan Iron vs. Hoshine Silicon Ind |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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