Correlation Between Jilin Chemical and Shenyang Chemical
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By analyzing existing cross correlation between Jilin Chemical Fibre and Shenyang Chemical Industry, you can compare the effects of market volatilities on Jilin Chemical and Shenyang 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 Jilin Chemical with a short position of Shenyang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jilin Chemical and Shenyang Chemical.
Diversification Opportunities for Jilin Chemical and Shenyang Chemical
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jilin and Shenyang is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Jilin Chemical Fibre and Shenyang Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenyang Chemical and Jilin Chemical 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 Jilin Chemical Fibre are associated (or correlated) with Shenyang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenyang Chemical has no effect on the direction of Jilin Chemical i.e., Jilin Chemical and Shenyang Chemical go up and down completely randomly.
Pair Corralation between Jilin Chemical and Shenyang Chemical
Assuming the 90 days trading horizon Jilin Chemical Fibre is expected to generate 1.04 times more return on investment than Shenyang Chemical. However, Jilin Chemical is 1.04 times more volatile than Shenyang Chemical Industry. It trades about -0.01 of its potential returns per unit of risk. Shenyang Chemical Industry is currently generating about -0.02 per unit of risk. If you would invest 489.00 in Jilin Chemical Fibre on October 18, 2024 and sell it today you would lose (142.00) from holding Jilin Chemical Fibre or give up 29.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jilin Chemical Fibre vs. Shenyang Chemical Industry
Performance |
| Timeline |
| Jilin Chemical Fibre |
| Shenyang Chemical |
Jilin Chemical and Shenyang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jilin Chemical and Shenyang Chemical
The main advantage of trading using opposite Jilin Chemical and Shenyang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jilin Chemical position performs unexpectedly, Shenyang 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 Shenyang Chemical will offset losses from the drop in Shenyang Chemical's long position.| Jilin Chemical vs. Zijin Mining Group | Jilin Chemical vs. Wanhua Chemical Group | Jilin Chemical vs. Baoshan Iron Steel | Jilin Chemical vs. Shandong Gold Mining |
| Shenyang Chemical vs. Eastroc Beverage Group | Shenyang Chemical vs. Impulse Qingdao Health | Shenyang Chemical vs. Offshore Oil Engineering | Shenyang Chemical vs. Jiangsu Yanghe Brewery |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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