Correlation Between Hubei Dinglong and Jilin Chemical
Specify exactly 2 symbols:
By analyzing existing cross correlation between Hubei Dinglong Chemical and Jilin Chemical Fibre, you can compare the effects of market volatilities on Hubei Dinglong and Jilin 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 Hubei Dinglong with a short position of Jilin Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Dinglong and Jilin Chemical.
Diversification Opportunities for Hubei Dinglong and Jilin Chemical
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hubei and Jilin is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Dinglong Chemical and Jilin Chemical Fibre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jilin Chemical Fibre and Hubei Dinglong 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 Hubei Dinglong Chemical are associated (or correlated) with Jilin Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jilin Chemical Fibre has no effect on the direction of Hubei Dinglong i.e., Hubei Dinglong and Jilin Chemical go up and down completely randomly.
Pair Corralation between Hubei Dinglong and Jilin Chemical
Assuming the 90 days trading horizon Hubei Dinglong Chemical is expected to generate 0.97 times more return on investment than Jilin Chemical. However, Hubei Dinglong Chemical is 1.03 times less risky than Jilin Chemical. It trades about 0.14 of its potential returns per unit of risk. Jilin Chemical Fibre is currently generating about 0.06 per unit of risk. If you would invest 2,514 in Hubei Dinglong Chemical on November 8, 2024 and sell it today you would earn a total of 89.00 from holding Hubei Dinglong Chemical or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Dinglong Chemical vs. Jilin Chemical Fibre
Performance |
| Timeline |
| Hubei Dinglong Chemical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Jilin Chemical Fibre |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hubei Dinglong and Jilin Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Dinglong and Jilin Chemical
The main advantage of trading using opposite Hubei Dinglong and Jilin Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Dinglong position performs unexpectedly, Jilin 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 Jilin Chemical will offset losses from the drop in Jilin Chemical's long position.The idea behind Hubei Dinglong Chemical and Jilin Chemical Fibre pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |