Correlation Between Kinik and Jinan Acetate
Can any of the company-specific risk be diversified away by investing in both Kinik 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 Kinik and Jinan Acetate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinik Co and Jinan Acetate Chemical, you can compare the effects of market volatilities on Kinik 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 Kinik with a short position of Jinan Acetate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinik and Jinan Acetate.
Diversification Opportunities for Kinik and Jinan Acetate
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kinik and Jinan is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Kinik 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 Kinik 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 Kinik 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 Kinik i.e., Kinik and Jinan Acetate go up and down completely randomly.
Pair Corralation between Kinik and Jinan Acetate
Assuming the 90 days trading horizon Kinik Co is expected to generate 1.85 times more return on investment than Jinan Acetate. However, Kinik is 1.85 times more volatile than Jinan Acetate Chemical. It trades about 0.06 of its potential returns per unit of risk. Jinan Acetate Chemical is currently generating about -0.31 per unit of risk. If you would invest 29,400 in Kinik Co on October 23, 2024 and sell it today you would earn a total of 650.00 from holding Kinik Co or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinik Co vs. Jinan Acetate Chemical
Performance |
| Timeline |
| Kinik |
| Jinan Acetate Chemical |
Kinik and Jinan Acetate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinik and Jinan Acetate
The main advantage of trading using opposite Kinik and Jinan Acetate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinik 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.| Kinik vs. Basso Industry Corp | Kinik vs. Kaulin Mfg | Kinik vs. TYC Brother Industrial | Kinik vs. Chung Hsin Electric Machinery |
| Jinan Acetate vs. San Fu Chemical | Jinan Acetate vs. Tex Year Industries | Jinan Acetate vs. Concraft Holding Co | Jinan Acetate vs. Coremax Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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