Correlation Between Guangxi Wuzhou and Baoshan Iron
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By analyzing existing cross correlation between Guangxi Wuzhou Communications and Baoshan Iron Steel, you can compare the effects of market volatilities on Guangxi Wuzhou 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 Guangxi Wuzhou with a short position of Baoshan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangxi Wuzhou and Baoshan Iron.
Diversification Opportunities for Guangxi Wuzhou and Baoshan Iron
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangxi and Baoshan is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Guangxi Wuzhou Communications 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 Guangxi Wuzhou 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 Guangxi Wuzhou Communications 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 Guangxi Wuzhou i.e., Guangxi Wuzhou and Baoshan Iron go up and down completely randomly.
Pair Corralation between Guangxi Wuzhou and Baoshan Iron
Assuming the 90 days trading horizon Guangxi Wuzhou Communications is expected to generate 2.95 times more return on investment than Baoshan Iron. However, Guangxi Wuzhou is 2.95 times more volatile than Baoshan Iron Steel. It trades about 0.09 of its potential returns per unit of risk. Baoshan Iron Steel is currently generating about -0.04 per unit of risk. If you would invest 390.00 in Guangxi Wuzhou Communications on October 19, 2024 and sell it today you would earn a total of 49.00 from holding Guangxi Wuzhou Communications or generate 12.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangxi Wuzhou Communications vs. Baoshan Iron Steel
Performance |
| Timeline |
| Guangxi Wuzhou Commu |
| Baoshan Iron Steel |
Guangxi Wuzhou and Baoshan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangxi Wuzhou and Baoshan Iron
The main advantage of trading using opposite Guangxi Wuzhou and Baoshan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangxi Wuzhou 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.| Guangxi Wuzhou vs. Zhejiang Yinlun Machinery | Guangxi Wuzhou vs. Yuan Longping High tech | Guangxi Wuzhou vs. Xingguang Agricultural Mach | Guangxi Wuzhou vs. Linzhou Heavy Machinery |
| Baoshan Iron vs. Anhui Huaheng Biotechnology | Baoshan Iron vs. Duzhe Publishing Media | Baoshan Iron vs. Maccura Biotechnology Co | Baoshan Iron vs. Offcn Education Technology |
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 Stocks Directory module to find actively traded stocks across global markets.
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