Correlation Between Lianhe Chemical and Jilin Chemical
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By analyzing existing cross correlation between Lianhe Chemical Technology and Jilin Chemical Fibre, you can compare the effects of market volatilities on Lianhe 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 Lianhe Chemical with a short position of Jilin Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lianhe Chemical and Jilin Chemical.
Diversification Opportunities for Lianhe Chemical and Jilin Chemical
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lianhe and Jilin is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Lianhe Chemical Technology 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 Lianhe 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 Lianhe Chemical Technology 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 Lianhe Chemical i.e., Lianhe Chemical and Jilin Chemical go up and down completely randomly.
Pair Corralation between Lianhe Chemical and Jilin Chemical
Assuming the 90 days trading horizon Lianhe Chemical Technology is expected to generate 0.71 times more return on investment than Jilin Chemical. However, Lianhe Chemical Technology is 1.41 times less risky than Jilin Chemical. It trades about 0.01 of its potential returns per unit of risk. Jilin Chemical Fibre is currently generating about -0.02 per unit of risk. If you would invest 600.00 in Lianhe Chemical Technology on August 27, 2024 and sell it today you would earn a total of 1.00 from holding Lianhe Chemical Technology or generate 0.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lianhe Chemical Technology vs. Jilin Chemical Fibre
Performance |
| Timeline |
| Lianhe Chemical Tech |
| Jilin Chemical Fibre |
Lianhe Chemical and Jilin Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lianhe Chemical and Jilin Chemical
The main advantage of trading using opposite Lianhe Chemical and Jilin Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lianhe 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.| Lianhe Chemical vs. Zijin Mining Group | Lianhe Chemical vs. Baoshan Iron Steel | Lianhe Chemical vs. Shandong Gold Mining | Lianhe Chemical vs. Rongsheng Petrochemical Co |
| 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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