Correlation Between Jilin Chemical and Huadong Medicine
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By analyzing existing cross correlation between Jilin Chemical Fibre and Huadong Medicine Co, you can compare the effects of market volatilities on Jilin Chemical and Huadong Medicine 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 Huadong Medicine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jilin Chemical and Huadong Medicine.
Diversification Opportunities for Jilin Chemical and Huadong Medicine
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jilin and Huadong is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Jilin Chemical Fibre and Huadong Medicine Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huadong Medicine 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 Huadong Medicine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huadong Medicine has no effect on the direction of Jilin Chemical i.e., Jilin Chemical and Huadong Medicine go up and down completely randomly.
Pair Corralation between Jilin Chemical and Huadong Medicine
Assuming the 90 days trading horizon Jilin Chemical Fibre is expected to generate 1.55 times more return on investment than Huadong Medicine. However, Jilin Chemical is 1.55 times more volatile than Huadong Medicine Co. It trades about 0.04 of its potential returns per unit of risk. Huadong Medicine Co is currently generating about -0.01 per unit of risk. If you would invest 315.00 in Jilin Chemical Fibre on September 26, 2024 and sell it today you would earn a total of 65.00 from holding Jilin Chemical Fibre or generate 20.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.66% |
| Values | Daily Returns |
Jilin Chemical Fibre vs. Huadong Medicine Co
Performance |
| Timeline |
| Jilin Chemical Fibre |
| Huadong Medicine |
Jilin Chemical and Huadong Medicine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jilin Chemical and Huadong Medicine
The main advantage of trading using opposite Jilin Chemical and Huadong Medicine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jilin Chemical position performs unexpectedly, Huadong Medicine 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 Huadong Medicine will offset losses from the drop in Huadong Medicine's long position.| Jilin Chemical vs. Wintao Communications Co | Jilin Chemical vs. Shanghai Rongtai Health | Jilin Chemical vs. Guangzhou Haige Communications | Jilin Chemical vs. Bank of Communications |
| Huadong Medicine vs. Industrial and Commercial | Huadong Medicine vs. Kweichow Moutai Co | Huadong Medicine vs. Agricultural Bank of | Huadong Medicine vs. China Mobile Limited |
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 Stocks Directory module to find actively traded stocks across global markets.
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