Correlation Between Xinjiang Baodi and Shandong Ruifeng
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By analyzing existing cross correlation between Xinjiang Baodi Mining and Shandong Ruifeng Chemical, you can compare the effects of market volatilities on Xinjiang Baodi and Shandong Ruifeng 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 Xinjiang Baodi with a short position of Shandong Ruifeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Baodi and Shandong Ruifeng.
Diversification Opportunities for Xinjiang Baodi and Shandong Ruifeng
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Xinjiang and Shandong is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Baodi Mining and Shandong Ruifeng Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Ruifeng Chemical and Xinjiang Baodi 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 Xinjiang Baodi Mining are associated (or correlated) with Shandong Ruifeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Ruifeng Chemical has no effect on the direction of Xinjiang Baodi i.e., Xinjiang Baodi and Shandong Ruifeng go up and down completely randomly.
Pair Corralation between Xinjiang Baodi and Shandong Ruifeng
Assuming the 90 days trading horizon Xinjiang Baodi is expected to generate 1.5 times less return on investment than Shandong Ruifeng. But when comparing it to its historical volatility, Xinjiang Baodi Mining is 1.24 times less risky than Shandong Ruifeng. It trades about 0.02 of its potential returns per unit of risk. Shandong Ruifeng Chemical is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 885.00 in Shandong Ruifeng Chemical on November 4, 2024 and sell it today you would earn a total of 36.00 from holding Shandong Ruifeng Chemical or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.03% |
| Values | Daily Returns |
Xinjiang Baodi Mining vs. Shandong Ruifeng Chemical
Performance |
| Timeline |
| Xinjiang Baodi Mining |
| Shandong Ruifeng Chemical |
Xinjiang Baodi and Shandong Ruifeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Baodi and Shandong Ruifeng
The main advantage of trading using opposite Xinjiang Baodi and Shandong Ruifeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Baodi position performs unexpectedly, Shandong Ruifeng 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 Shandong Ruifeng will offset losses from the drop in Shandong Ruifeng's long position.| Xinjiang Baodi vs. Zijin Mining Group | Xinjiang Baodi vs. Wanhua Chemical Group | Xinjiang Baodi vs. Baoshan Iron Steel | Xinjiang Baodi vs. Shandong Gold Mining |
| Shandong Ruifeng vs. Zijin Mining Group | Shandong Ruifeng vs. Wanhua Chemical Group | Shandong Ruifeng vs. Baoshan Iron Steel | Shandong Ruifeng 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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