Correlation Between Anji Foodstuff and Baoshan Iron
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By analyzing existing cross correlation between Anji Foodstuff Co and Baoshan Iron Steel, you can compare the effects of market volatilities on Anji Foodstuff and Baoshan Iron 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 Anji Foodstuff with a short position of Baoshan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anji Foodstuff and Baoshan Iron.
Diversification Opportunities for Anji Foodstuff and Baoshan Iron
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anji and Baoshan is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Anji Foodstuff Co and Baoshan Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baoshan Iron Steel and Anji Foodstuff 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 Anji Foodstuff Co are associated (or correlated) with Baoshan Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baoshan Iron Steel has no effect on the direction of Anji Foodstuff i.e., Anji Foodstuff and Baoshan Iron go up and down completely randomly.
Pair Corralation between Anji Foodstuff and Baoshan Iron
Assuming the 90 days trading horizon Anji Foodstuff Co is expected to generate 1.34 times more return on investment than Baoshan Iron. However, Anji Foodstuff is 1.34 times more volatile than Baoshan Iron Steel. It trades about 0.25 of its potential returns per unit of risk. Baoshan Iron Steel is currently generating about 0.14 per unit of risk. If you would invest 630.00 in Anji Foodstuff Co on September 15, 2024 and sell it today you would earn a total of 379.00 from holding Anji Foodstuff Co or generate 60.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Anji Foodstuff Co vs. Baoshan Iron Steel
Performance |
Timeline |
Anji Foodstuff |
Baoshan Iron Steel |
Anji Foodstuff and Baoshan Iron Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Anji Foodstuff and Baoshan Iron
The main advantage of trading using opposite Anji Foodstuff and Baoshan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anji Foodstuff position performs unexpectedly, Baoshan Iron 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 Baoshan Iron will offset losses from the drop in Baoshan Iron's long position.Anji Foodstuff vs. Nanjing Putian Telecommunications | Anji Foodstuff vs. Tianjin Realty Development | Anji Foodstuff vs. Kangyue Technology Co | Anji Foodstuff vs. Shenzhen Hifuture Electric |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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