Correlation Between Shenyang Chemical and Jilin Chemical
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By analyzing existing cross correlation between Shenyang Chemical Industry and Jilin Chemical Fibre, you can compare the effects of market volatilities on Shenyang Chemical and Jilin 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 Shenyang Chemical with a short position of Jilin Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenyang Chemical and Jilin Chemical.
Diversification Opportunities for Shenyang Chemical and Jilin Chemical
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenyang and Jilin is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Chemical Industry and Jilin Chemical Fibre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jilin Chemical Fibre and Shenyang 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 Shenyang Chemical Industry are associated (or correlated) with Jilin Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jilin Chemical Fibre has no effect on the direction of Shenyang Chemical i.e., Shenyang Chemical and Jilin Chemical go up and down completely randomly.
Pair Corralation between Shenyang Chemical and Jilin Chemical
Assuming the 90 days trading horizon Shenyang Chemical Industry is expected to under-perform the Jilin Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Shenyang Chemical Industry is 1.04 times less risky than Jilin Chemical. The stock trades about -0.02 of its potential returns per unit of risk. The Jilin Chemical Fibre is currently generating about -0.01 of returns per unit of risk over similar time horizon. 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 |
Shenyang Chemical Industry vs. Jilin Chemical Fibre
Performance |
| Timeline |
| Shenyang Chemical |
| Jilin Chemical Fibre |
Shenyang Chemical and Jilin Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenyang Chemical and Jilin Chemical
The main advantage of trading using opposite Shenyang Chemical and Jilin Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenyang Chemical position performs unexpectedly, Jilin 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 Jilin Chemical will offset losses from the drop in Jilin Chemical's long position.| Shenyang Chemical vs. Eastroc Beverage Group | Shenyang Chemical vs. Impulse Qingdao Health | Shenyang Chemical vs. Offshore Oil Engineering | Shenyang Chemical vs. Jiangsu Yanghe Brewery |
| Jilin Chemical vs. Zijin Mining Group | Jilin Chemical vs. Wanhua Chemical Group | Jilin Chemical vs. Baoshan Iron Steel | Jilin Chemical vs. Shandong Gold Mining |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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