Correlation Between Shenzhen SDG and Jilin Chemical
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By analyzing existing cross correlation between Shenzhen SDG Information and Jilin Chemical Fibre, you can compare the effects of market volatilities on Shenzhen SDG and Jilin Chemical 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 Shenzhen SDG with a short position of Jilin Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen SDG and Jilin Chemical.
Diversification Opportunities for Shenzhen SDG and Jilin Chemical
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Jilin is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen SDG Information and Jilin Chemical Fibre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jilin Chemical Fibre and Shenzhen SDG 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 Shenzhen SDG Information are associated (or correlated) with Jilin Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jilin Chemical Fibre has no effect on the direction of Shenzhen SDG i.e., Shenzhen SDG and Jilin Chemical go up and down completely randomly.
Pair Corralation between Shenzhen SDG and Jilin Chemical
Assuming the 90 days trading horizon Shenzhen SDG Information is expected to under-perform the Jilin Chemical. In addition to that, Shenzhen SDG is 1.13 times more volatile than Jilin Chemical Fibre. It trades about -0.01 of its total potential returns per unit of risk. Jilin Chemical Fibre is currently generating about 0.03 per unit of volatility. If you would invest 293.00 in Jilin Chemical Fibre on October 14, 2024 and sell it today you would earn a total of 35.00 from holding Jilin Chemical Fibre or generate 11.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Shenzhen SDG Information vs. Jilin Chemical Fibre
Performance |
Timeline |
Shenzhen SDG Information |
Jilin Chemical Fibre |
Shenzhen SDG and Jilin Chemical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shenzhen SDG and Jilin Chemical
The main advantage of trading using opposite Shenzhen SDG and Jilin Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen SDG position performs unexpectedly, Jilin Chemical 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 Jilin Chemical will offset losses from the drop in Jilin Chemical's long position.Shenzhen SDG vs. China Building Material | Shenzhen SDG vs. Jilin OLED Material | Shenzhen SDG vs. Lontium Semiconductor Corp | Shenzhen SDG vs. Ningxia Building Materials |
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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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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