Correlation Between Liaoning Chengda and Baoshan Iron
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By analyzing existing cross correlation between Liaoning Chengda Biotechnology and Baoshan Iron Steel, you can compare the effects of market volatilities on Liaoning Chengda 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 Liaoning Chengda with a short position of Baoshan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Chengda and Baoshan Iron.
Diversification Opportunities for Liaoning Chengda and Baoshan Iron
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Liaoning and Baoshan is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Chengda Biotechnology 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 Liaoning Chengda 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 Liaoning Chengda Biotechnology 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 Liaoning Chengda i.e., Liaoning Chengda and Baoshan Iron go up and down completely randomly.
Pair Corralation between Liaoning Chengda and Baoshan Iron
Assuming the 90 days trading horizon Liaoning Chengda Biotechnology is expected to under-perform the Baoshan Iron. But the stock apears to be less risky and, when comparing its historical volatility, Liaoning Chengda Biotechnology is 1.05 times less risky than Baoshan Iron. The stock trades about -0.02 of its potential returns per unit of risk. The Baoshan Iron Steel is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 602.00 in Baoshan Iron Steel on October 16, 2024 and sell it today you would earn a total of 49.00 from holding Baoshan Iron Steel or generate 8.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liaoning Chengda Biotechnology vs. Baoshan Iron Steel
Performance |
| Timeline |
| Liaoning Chengda Bio |
| Baoshan Iron Steel |
Liaoning Chengda and Baoshan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Chengda and Baoshan Iron
The main advantage of trading using opposite Liaoning Chengda and Baoshan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Chengda 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.| Liaoning Chengda vs. Ningxia Building Materials | Liaoning Chengda vs. Beijing Baolande Software | Liaoning Chengda vs. Fuda Alloy Materials | Liaoning Chengda vs. Orinko Advanced Plastics |
| Baoshan Iron vs. Changchun BCHT Biotechnology | Baoshan Iron vs. Yili Chuanning Biotechnology | Baoshan Iron vs. MayAir Technology Co | Baoshan Iron vs. Liaoning Chengda Biotechnology |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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