Correlation Between Tainan Spinning and Jinan Acetate
Can any of the company-specific risk be diversified away by investing in both Tainan Spinning and Jinan Acetate 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 Tainan Spinning and Jinan Acetate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tainan Spinning Co and Jinan Acetate Chemical, you can compare the effects of market volatilities on Tainan Spinning and Jinan Acetate 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 Tainan Spinning with a short position of Jinan Acetate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tainan Spinning and Jinan Acetate.
Diversification Opportunities for Tainan Spinning and Jinan Acetate
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tainan and Jinan is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Tainan Spinning Co and Jinan Acetate Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinan Acetate Chemical and Tainan Spinning 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 Tainan Spinning Co are associated (or correlated) with Jinan Acetate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinan Acetate Chemical has no effect on the direction of Tainan Spinning i.e., Tainan Spinning and Jinan Acetate go up and down completely randomly.
Pair Corralation between Tainan Spinning and Jinan Acetate
Assuming the 90 days trading horizon Tainan Spinning Co is expected to under-perform the Jinan Acetate. But the stock apears to be less risky and, when comparing its historical volatility, Tainan Spinning Co is 1.53 times less risky than Jinan Acetate. The stock trades about 0.0 of its potential returns per unit of risk. The Jinan Acetate Chemical is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 80,500 in Jinan Acetate Chemical on September 12, 2024 and sell it today you would earn a total of 13,600 from holding Jinan Acetate Chemical or generate 16.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tainan Spinning Co vs. Jinan Acetate Chemical
Performance |
| Timeline |
| Tainan Spinning |
| Jinan Acetate Chemical |
Tainan Spinning and Jinan Acetate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tainan Spinning and Jinan Acetate
The main advantage of trading using opposite Tainan Spinning and Jinan Acetate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tainan Spinning position performs unexpectedly, Jinan Acetate 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 Jinan Acetate will offset losses from the drop in Jinan Acetate's long position.| Tainan Spinning vs. Lealea Enterprise Co | Tainan Spinning vs. China Petrochemical Development | Tainan Spinning vs. Li Peng Enterprise | Tainan Spinning vs. Oriental Union Chemical |
| Jinan Acetate vs. Tainan Spinning Co | Jinan Acetate vs. Lealea Enterprise Co | Jinan Acetate vs. China Petrochemical Development | Jinan Acetate vs. Ruentex Development 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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