Correlation Between Jointo Energy and Shenyang Chemical
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By analyzing existing cross correlation between Jointo Energy Investment and Shenyang Chemical Industry, you can compare the effects of market volatilities on Jointo Energy 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 Jointo Energy with a short position of Shenyang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jointo Energy and Shenyang Chemical.
Diversification Opportunities for Jointo Energy and Shenyang Chemical
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jointo and Shenyang is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Jointo Energy Investment and Shenyang Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenyang Chemical and Jointo Energy 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 Jointo Energy Investment 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 Jointo Energy i.e., Jointo Energy and Shenyang Chemical go up and down completely randomly.
Pair Corralation between Jointo Energy and Shenyang Chemical
Assuming the 90 days trading horizon Jointo Energy is expected to generate 1.07 times less return on investment than Shenyang Chemical. But when comparing it to its historical volatility, Jointo Energy Investment is 1.19 times less risky than Shenyang Chemical. It trades about 0.06 of its potential returns per unit of risk. Shenyang Chemical Industry is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 318.00 in Shenyang Chemical Industry on November 7, 2024 and sell it today you would earn a total of 5.00 from holding Shenyang Chemical Industry or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jointo Energy Investment vs. Shenyang Chemical Industry
Performance |
| Timeline |
| Jointo Energy Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shenyang Chemical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Jointo Energy and Shenyang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jointo Energy and Shenyang Chemical
The main advantage of trading using opposite Jointo Energy and Shenyang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jointo Energy 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.The idea behind Jointo Energy Investment and Shenyang Chemical Industry pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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