Correlation Between Baosheng Media and Steel Connect
Can any of the company-specific risk be diversified away by investing in both Baosheng Media and Steel Connect at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Baosheng Media and Steel Connect into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baosheng Media Group and Steel Connect, you can compare the effects of market volatilities on Baosheng Media and Steel Connect 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 Baosheng Media with a short position of Steel Connect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baosheng Media and Steel Connect.
Diversification Opportunities for Baosheng Media and Steel Connect
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Baosheng and Steel is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Baosheng Media Group and Steel Connect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Connect and Baosheng Media 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 Baosheng Media Group are associated (or correlated) with Steel Connect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Connect has no effect on the direction of Baosheng Media i.e., Baosheng Media and Steel Connect go up and down completely randomly.
Pair Corralation between Baosheng Media and Steel Connect
Given the investment horizon of 90 days Baosheng Media is expected to generate 2.13 times less return on investment than Steel Connect. In addition to that, Baosheng Media is 1.73 times more volatile than Steel Connect. It trades about 0.01 of its total potential returns per unit of risk. Steel Connect is currently generating about 0.02 per unit of volatility. If you would invest 993.00 in Steel Connect on August 24, 2024 and sell it today you would earn a total of 7.00 from holding Steel Connect or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baosheng Media Group vs. Steel Connect
Performance |
| Timeline |
| Baosheng Media Group |
| Steel Connect |
Baosheng Media and Steel Connect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baosheng Media and Steel Connect
The main advantage of trading using opposite Baosheng Media and Steel Connect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baosheng Media position performs unexpectedly, Steel Connect 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 Steel Connect will offset losses from the drop in Steel Connect's long position.| Baosheng Media vs. MGO Global Common | Baosheng Media vs. National CineMedia | Baosheng Media vs. Impact Fusion International | Baosheng Media vs. Steel Connect |
| Steel Connect vs. Baosheng Media Group | Steel Connect vs. Impact Fusion International | Steel Connect vs. Mirriad Advertising plc | Steel Connect vs. CyberAgent ADR |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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