Correlation Between Baoshan Iron and Industrial Bank
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By analyzing existing cross correlation between Baoshan Iron Steel and Industrial Bank Co, you can compare the effects of market volatilities on Baoshan Iron and Industrial Bank 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 Industrial Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Industrial Bank.
Diversification Opportunities for Baoshan Iron and Industrial Bank
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baoshan and Industrial is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Industrial Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Bank 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 Industrial Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Bank has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Industrial Bank go up and down completely randomly.
Pair Corralation between Baoshan Iron and Industrial Bank
Assuming the 90 days trading horizon Baoshan Iron Steel is expected to generate 1.28 times more return on investment than Industrial Bank. However, Baoshan Iron is 1.28 times more volatile than Industrial Bank Co. It trades about 0.23 of its potential returns per unit of risk. Industrial Bank Co is currently generating about 0.26 per unit of risk. If you would invest 656.00 in Baoshan Iron Steel on September 25, 2024 and sell it today you would earn a total of 43.00 from holding Baoshan Iron Steel or generate 6.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Baoshan Iron Steel vs. Industrial Bank Co
Performance |
Timeline |
Baoshan Iron Steel |
Industrial Bank |
Baoshan Iron and Industrial Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Baoshan Iron and Industrial Bank
The main advantage of trading using opposite Baoshan Iron and Industrial Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Industrial Bank 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 Industrial Bank will offset losses from the drop in Industrial Bank'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 |
Industrial Bank vs. Meinian Onehealth Healthcare | Industrial Bank vs. Grandblue Environment Co | Industrial Bank vs. Dezhan HealthCare Co | Industrial Bank vs. Baoshan Iron Steel |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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