Correlation Between Chia Her and Jinli Group
Can any of the company-specific risk be diversified away by investing in both Chia Her and Jinli Group 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 Chia Her and Jinli Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chia Her Industrial and Jinli Group Holdings, you can compare the effects of market volatilities on Chia Her and Jinli Group 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 Chia Her with a short position of Jinli Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Her and Jinli Group.
Diversification Opportunities for Chia Her and Jinli Group
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chia and Jinli is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Chia Her Industrial and Jinli Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinli Group Holdings and Chia Her 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 Chia Her Industrial are associated (or correlated) with Jinli Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinli Group Holdings has no effect on the direction of Chia Her i.e., Chia Her and Jinli Group go up and down completely randomly.
Pair Corralation between Chia Her and Jinli Group
Assuming the 90 days trading horizon Chia Her is expected to generate 26.1 times less return on investment than Jinli Group. In addition to that, Chia Her is 1.71 times more volatile than Jinli Group Holdings. It trades about 0.01 of its total potential returns per unit of risk. Jinli Group Holdings is currently generating about 0.3 per unit of volatility. If you would invest 1,075 in Jinli Group Holdings on September 12, 2024 and sell it today you would earn a total of 235.00 from holding Jinli Group Holdings or generate 21.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chia Her Industrial vs. Jinli Group Holdings
Performance |
| Timeline |
| Chia Her Industrial |
| Jinli Group Holdings |
Chia Her and Jinli Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Her and Jinli Group
The main advantage of trading using opposite Chia Her and Jinli Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Her position performs unexpectedly, Jinli Group 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 Jinli Group will offset losses from the drop in Jinli Group's long position.| Chia Her vs. Feng Tay Enterprises | Chia Her vs. Ruentex Development Co | Chia Her vs. WiseChip Semiconductor | Chia Her vs. Novatek Microelectronics Corp |
| Jinli Group vs. Shui Mu International Co | Jinli Group vs. Les Enphants Co | Jinli Group vs. Victory New Materials | Jinli Group vs. Shinih Enterprise 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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