Correlation Between Jilin Chemical and Hubei Dinglong
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By analyzing existing cross correlation between Jilin Chemical Fibre and Hubei Dinglong Chemical, you can compare the effects of market volatilities on Jilin Chemical and Hubei Dinglong 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 Hubei Dinglong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jilin Chemical and Hubei Dinglong.
Diversification Opportunities for Jilin Chemical and Hubei Dinglong
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jilin and Hubei is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Jilin Chemical Fibre and Hubei Dinglong Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Dinglong 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 Hubei Dinglong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Dinglong Chemical has no effect on the direction of Jilin Chemical i.e., Jilin Chemical and Hubei Dinglong go up and down completely randomly.
Pair Corralation between Jilin Chemical and Hubei Dinglong
Assuming the 90 days trading horizon Jilin Chemical Fibre is expected to under-perform the Hubei Dinglong. In addition to that, Jilin Chemical is 1.11 times more volatile than Hubei Dinglong Chemical. It trades about -0.06 of its total potential returns per unit of risk. Hubei Dinglong Chemical is currently generating about -0.03 per unit of volatility. If you would invest 2,734 in Hubei Dinglong Chemical on August 29, 2024 and sell it today you would lose (75.00) from holding Hubei Dinglong Chemical or give up 2.74% 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. Hubei Dinglong Chemical
Performance |
| Timeline |
| Jilin Chemical Fibre |
| Hubei Dinglong Chemical |
Jilin Chemical and Hubei Dinglong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jilin Chemical and Hubei Dinglong
The main advantage of trading using opposite Jilin Chemical and Hubei Dinglong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jilin Chemical position performs unexpectedly, Hubei Dinglong 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 Hubei Dinglong will offset losses from the drop in Hubei Dinglong'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 |
| Hubei Dinglong vs. Zijin Mining Group | Hubei Dinglong vs. Baoshan Iron Steel | Hubei Dinglong vs. Shandong Gold Mining | Hubei Dinglong vs. Rongsheng Petrochemical Co |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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