Correlation Between Baoshan Iron and Bank of Communications
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By analyzing existing cross correlation between Baoshan Iron Steel and Bank of Communications, you can compare the effects of market volatilities on Baoshan Iron and Bank of Communications 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 Bank of Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Bank of Communications.
Diversification Opportunities for Baoshan Iron and Bank of Communications
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baoshan and Bank is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Bank of Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Communications 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 Bank of Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Communications has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Bank of Communications go up and down completely randomly.
Pair Corralation between Baoshan Iron and Bank of Communications
Assuming the 90 days trading horizon Baoshan Iron Steel is expected to generate 1.14 times more return on investment than Bank of Communications. However, Baoshan Iron is 1.14 times more volatile than Bank of Communications. It trades about 0.19 of its potential returns per unit of risk. Bank of Communications is currently generating about 0.12 per unit of risk. If you would invest 660.00 in Baoshan Iron Steel on September 28, 2024 and sell it today you would earn a total of 39.00 from holding Baoshan Iron Steel or generate 5.91% 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. Bank of Communications
Performance |
Timeline |
Baoshan Iron Steel |
Bank of Communications |
Baoshan Iron and Bank of Communications Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Baoshan Iron and Bank of Communications
The main advantage of trading using opposite Baoshan Iron and Bank of Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Bank of Communications 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 Bank of Communications will offset losses from the drop in Bank of Communications' long position.Baoshan Iron vs. Bank of Communications | Baoshan Iron vs. Guizhou BroadcastingTV Info | Baoshan Iron vs. Anhui Transport Consulting | Baoshan Iron vs. Shandong Hi Speed RoadBridge |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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