Correlation Between Baoshan Iron and China Marine
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By analyzing existing cross correlation between Baoshan Iron Steel and China Marine Information, you can compare the effects of market volatilities on Baoshan Iron and China Marine 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 Baoshan Iron with a short position of China Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and China Marine.
Diversification Opportunities for Baoshan Iron and China Marine
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baoshan and China is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and China Marine Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Marine Information and Baoshan Iron 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 Baoshan Iron Steel are associated (or correlated) with China Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Marine Information has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and China Marine go up and down completely randomly.
Pair Corralation between Baoshan Iron and China Marine
Assuming the 90 days trading horizon Baoshan Iron is expected to generate 1.38 times less return on investment than China Marine. But when comparing it to its historical volatility, Baoshan Iron Steel is 1.59 times less risky than China Marine. It trades about 0.04 of its potential returns per unit of risk. China Marine Information is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,341 in China Marine Information on September 26, 2024 and sell it today you would earn a total of 573.00 from holding China Marine Information or generate 24.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Baoshan Iron Steel vs. China Marine Information
Performance |
Timeline |
Baoshan Iron Steel |
China Marine Information |
Baoshan Iron and China Marine Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Baoshan Iron and China Marine
The main advantage of trading using opposite Baoshan Iron and China Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, China Marine 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 China Marine will offset losses from the drop in China Marine's long position.Baoshan Iron vs. Wanhua Chemical Group | Baoshan Iron vs. Shandong Gold Mining | Baoshan Iron vs. Rongsheng Petrochemical Co | Baoshan Iron vs. Inner Mongolia BaoTou |
China Marine vs. Tianjin Pengling Rubber | China Marine vs. Guangzhou Tinci Materials | China Marine vs. Ningxia Building Materials | China Marine vs. Jiugui Liquor Co |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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