Correlation Between Baoshan Iron and Sanxiang Advanced
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By analyzing existing cross correlation between Baoshan Iron Steel and Sanxiang Advanced Materials, you can compare the effects of market volatilities on Baoshan Iron and Sanxiang Advanced 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 Sanxiang Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baoshan Iron and Sanxiang Advanced.
Diversification Opportunities for Baoshan Iron and Sanxiang Advanced
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baoshan and Sanxiang is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Baoshan Iron Steel and Sanxiang Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanxiang Advanced 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 Sanxiang Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanxiang Advanced has no effect on the direction of Baoshan Iron i.e., Baoshan Iron and Sanxiang Advanced go up and down completely randomly.
Pair Corralation between Baoshan Iron and Sanxiang Advanced
Assuming the 90 days trading horizon Baoshan Iron is expected to generate 1.41 times less return on investment than Sanxiang Advanced. But when comparing it to its historical volatility, Baoshan Iron Steel is 1.6 times less risky than Sanxiang Advanced. It trades about 0.11 of its potential returns per unit of risk. Sanxiang Advanced Materials is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,374 in Sanxiang Advanced Materials on September 24, 2024 and sell it today you would earn a total of 268.00 from holding Sanxiang Advanced Materials or generate 19.51% 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. Sanxiang Advanced Materials
Performance |
Timeline |
Baoshan Iron Steel |
Sanxiang Advanced |
Baoshan Iron and Sanxiang Advanced Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Baoshan Iron and Sanxiang Advanced
The main advantage of trading using opposite Baoshan Iron and Sanxiang Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baoshan Iron position performs unexpectedly, Sanxiang Advanced 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 Sanxiang Advanced will offset losses from the drop in Sanxiang Advanced'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 |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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