Correlation Between Chengtun Mining and Baoshan Iron
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By analyzing existing cross correlation between Chengtun Mining Group and Baoshan Iron Steel, you can compare the effects of market volatilities on Chengtun Mining 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 Chengtun Mining with a short position of Baoshan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengtun Mining and Baoshan Iron.
Diversification Opportunities for Chengtun Mining and Baoshan Iron
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chengtun and Baoshan is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Chengtun Mining Group 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 Chengtun Mining 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 Chengtun Mining Group 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 Chengtun Mining i.e., Chengtun Mining and Baoshan Iron go up and down completely randomly.
Pair Corralation between Chengtun Mining and Baoshan Iron
Assuming the 90 days trading horizon Chengtun Mining Group is expected to under-perform the Baoshan Iron. In addition to that, Chengtun Mining is 1.48 times more volatile than Baoshan Iron Steel. It trades about 0.0 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 609.00 in Baoshan Iron Steel on November 7, 2024 and sell it today you would earn a total of 92.00 from holding Baoshan Iron Steel or generate 15.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengtun Mining Group vs. Baoshan Iron Steel
Performance |
| Timeline |
| Chengtun Mining Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Baoshan Iron Steel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Chengtun Mining and Baoshan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengtun Mining and Baoshan Iron
The main advantage of trading using opposite Chengtun Mining and Baoshan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengtun Mining 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.The idea behind Chengtun Mining Group and Baoshan Iron Steel pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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