Correlation Between Xinjiang Baodi and Baoshan Iron
Specify exactly 2 symbols:
By analyzing existing cross correlation between Xinjiang Baodi Mining and Baoshan Iron Steel, you can compare the effects of market volatilities on Xinjiang Baodi 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 Xinjiang Baodi with a short position of Baoshan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Baodi and Baoshan Iron.
Diversification Opportunities for Xinjiang Baodi and Baoshan Iron
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xinjiang and Baoshan is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Baodi Mining 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 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 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 Xinjiang Baodi i.e., Xinjiang Baodi and Baoshan Iron go up and down completely randomly.
Pair Corralation between Xinjiang Baodi and Baoshan Iron
Assuming the 90 days trading horizon Xinjiang Baodi Mining is expected to generate 1.64 times more return on investment than Baoshan Iron. However, Xinjiang Baodi is 1.64 times more volatile than Baoshan Iron Steel. It trades about 0.02 of its potential returns per unit of risk. Baoshan Iron Steel is currently generating about 0.03 per unit of risk. If you would invest 604.00 in Xinjiang Baodi Mining on November 7, 2024 and sell it today you would earn a total of 16.00 from holding Xinjiang Baodi Mining or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.64% |
| Values | Daily Returns |
Xinjiang Baodi Mining vs. Baoshan Iron Steel
Performance |
| Timeline |
| Xinjiang Baodi Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Baoshan Iron Steel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Xinjiang Baodi and Baoshan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Baodi and Baoshan Iron
The main advantage of trading using opposite Xinjiang Baodi and Baoshan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Baodi 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 Xinjiang Baodi Mining 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |