Correlation Between Lealea Enterprise and Jinan Acetate
Can any of the company-specific risk be diversified away by investing in both Lealea Enterprise 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 Lealea Enterprise and Jinan Acetate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lealea Enterprise Co and Jinan Acetate Chemical, you can compare the effects of market volatilities on Lealea Enterprise 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 Lealea Enterprise with a short position of Jinan Acetate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lealea Enterprise and Jinan Acetate.
Diversification Opportunities for Lealea Enterprise and Jinan Acetate
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lealea and Jinan is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lealea Enterprise 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 Lealea Enterprise 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 Lealea Enterprise 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 Lealea Enterprise i.e., Lealea Enterprise and Jinan Acetate go up and down completely randomly.
Pair Corralation between Lealea Enterprise and Jinan Acetate
Assuming the 90 days trading horizon Lealea Enterprise is expected to generate 8.48 times less return on investment than Jinan Acetate. But when comparing it to its historical volatility, Lealea Enterprise Co is 1.85 times less risky than Jinan Acetate. It trades about 0.04 of its potential returns per unit of risk. Jinan Acetate Chemical is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 87,800 in Jinan Acetate Chemical on September 12, 2024 and sell it today you would earn a total of 6,300 from holding Jinan Acetate Chemical or generate 7.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lealea Enterprise Co vs. Jinan Acetate Chemical
Performance |
| Timeline |
| Lealea Enterprise |
| Jinan Acetate Chemical |
Lealea Enterprise and Jinan Acetate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lealea Enterprise and Jinan Acetate
The main advantage of trading using opposite Lealea Enterprise and Jinan Acetate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lealea Enterprise 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.| Lealea Enterprise vs. Feng Tay Enterprises | Lealea Enterprise vs. Ruentex Development Co | Lealea Enterprise vs. WiseChip Semiconductor | Lealea Enterprise vs. Novatek Microelectronics Corp |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |