Correlation Between Chin Yang and JC Chemical
Can any of the company-specific risk be diversified away by investing in both Chin Yang and JC Chemical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Chin Yang and JC Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chin Yang Chemical and JC Chemical Co, you can compare the effects of market volatilities on Chin Yang and JC 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 Chin Yang with a short position of JC Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chin Yang and JC Chemical.
Diversification Opportunities for Chin Yang and JC Chemical
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chin and 137950 is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Chin Yang Chemical and JC Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JC Chemical and Chin Yang 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 Chin Yang Chemical are associated (or correlated) with JC Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JC Chemical has no effect on the direction of Chin Yang i.e., Chin Yang and JC Chemical go up and down completely randomly.
Pair Corralation between Chin Yang and JC Chemical
Assuming the 90 days trading horizon Chin Yang Chemical is expected to under-perform the JC Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Chin Yang Chemical is 1.15 times less risky than JC Chemical. The stock trades about -0.24 of its potential returns per unit of risk. The JC Chemical Co is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 471,500 in JC Chemical Co on September 3, 2024 and sell it today you would lose (68,000) from holding JC Chemical Co or give up 14.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chin Yang Chemical vs. JC Chemical Co
Performance |
| Timeline |
| Chin Yang Chemical |
| JC Chemical |
Chin Yang and JC Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chin Yang and JC Chemical
The main advantage of trading using opposite Chin Yang and JC Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chin Yang position performs unexpectedly, JC 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 JC Chemical will offset losses from the drop in JC Chemical's long position.| Chin Yang vs. AptaBio Therapeutics | Chin Yang vs. Daewoo SBI SPAC | Chin Yang vs. Dream Security co | Chin Yang vs. Microfriend |
| JC Chemical vs. Busan Industrial Co | JC Chemical vs. UNISEM Co | JC Chemical vs. RPBio Inc | JC Chemical vs. Finebesteel |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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