Correlation Between Rising Nonferrous and Baoshan Iron
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By analyzing existing cross correlation between Rising Nonferrous Metals and Baoshan Iron Steel, you can compare the effects of market volatilities on Rising Nonferrous 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 Rising Nonferrous with a short position of Baoshan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rising Nonferrous and Baoshan Iron.
Diversification Opportunities for Rising Nonferrous and Baoshan Iron
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rising and Baoshan is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Rising Nonferrous Metals 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 Rising Nonferrous 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 Rising Nonferrous Metals 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 Rising Nonferrous i.e., Rising Nonferrous and Baoshan Iron go up and down completely randomly.
Pair Corralation between Rising Nonferrous and Baoshan Iron
Assuming the 90 days trading horizon Rising Nonferrous Metals is expected to generate 1.78 times more return on investment than Baoshan Iron. However, Rising Nonferrous is 1.78 times more volatile than Baoshan Iron Steel. It trades about 0.05 of its potential returns per unit of risk. Baoshan Iron Steel is currently generating about -0.09 per unit of risk. If you would invest 2,858 in Rising Nonferrous Metals on October 28, 2024 and sell it today you would earn a total of 62.00 from holding Rising Nonferrous Metals or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rising Nonferrous Metals vs. Baoshan Iron Steel
Performance |
| Timeline |
| Rising Nonferrous Metals |
| Baoshan Iron Steel |
Rising Nonferrous and Baoshan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rising Nonferrous and Baoshan Iron
The main advantage of trading using opposite Rising Nonferrous and Baoshan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rising Nonferrous 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.| Rising Nonferrous vs. Zijin Mining Group | Rising Nonferrous vs. Wanhua Chemical Group | Rising Nonferrous vs. Baoshan Iron Steel | Rising Nonferrous vs. Shandong Gold Mining |
| Baoshan Iron vs. Western Metal Materials | Baoshan Iron vs. Bosera CMSK Industrial | Baoshan Iron vs. Xinjiang Baodi Mining | Baoshan Iron vs. Chengtun Mining Group |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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