Correlation Between Jilin Chemical and Lianhe Chemical
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By analyzing existing cross correlation between Jilin Chemical Fibre and Lianhe Chemical Technology, you can compare the effects of market volatilities on Jilin Chemical and Lianhe 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 Lianhe Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jilin Chemical and Lianhe Chemical.
Diversification Opportunities for Jilin Chemical and Lianhe Chemical
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jilin and Lianhe is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Jilin Chemical Fibre and Lianhe Chemical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lianhe Chemical Tech 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 Lianhe Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lianhe Chemical Tech has no effect on the direction of Jilin Chemical i.e., Jilin Chemical and Lianhe Chemical go up and down completely randomly.
Pair Corralation between Jilin Chemical and Lianhe Chemical
Assuming the 90 days trading horizon Jilin Chemical Fibre is expected to under-perform the Lianhe Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Jilin Chemical Fibre is 1.23 times less risky than Lianhe Chemical. The stock trades about -0.25 of its potential returns per unit of risk. The Lianhe Chemical Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 564.00 in Lianhe Chemical Technology on October 21, 2024 and sell it today you would earn a total of 12.00 from holding Lianhe Chemical Technology or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jilin Chemical Fibre vs. Lianhe Chemical Technology
Performance |
| Timeline |
| Jilin Chemical Fibre |
| Lianhe Chemical Tech |
Jilin Chemical and Lianhe Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jilin Chemical and Lianhe Chemical
The main advantage of trading using opposite Jilin Chemical and Lianhe Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jilin Chemical position performs unexpectedly, Lianhe 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 Lianhe Chemical will offset losses from the drop in Lianhe Chemical's long position.| Jilin Chemical vs. Digiwin Software Co | Jilin Chemical vs. Wuhan Yangtze Communication | Jilin Chemical vs. Vontron Technology Co | Jilin Chemical vs. Tianshui Huatian Technology |
| Lianhe Chemical vs. Anhui Transport Consulting | Lianhe Chemical vs. Aluminum Corp of | Lianhe Chemical vs. Tianshan Aluminum Group | Lianhe Chemical vs. Chongqing Shunbo Aluminum |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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