Correlation Between Jilin Jlu and Yangmei Chemical
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By analyzing existing cross correlation between Jilin Jlu Communication and Yangmei Chemical Co, you can compare the effects of market volatilities on Jilin Jlu and Yangmei 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 Jilin Jlu with a short position of Yangmei Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jilin Jlu and Yangmei Chemical.
Diversification Opportunities for Jilin Jlu and Yangmei Chemical
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jilin and Yangmei is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Jilin Jlu Communication and Yangmei Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yangmei Chemical and Jilin Jlu 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 Jilin Jlu Communication are associated (or correlated) with Yangmei Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yangmei Chemical has no effect on the direction of Jilin Jlu i.e., Jilin Jlu and Yangmei Chemical go up and down completely randomly.
Pair Corralation between Jilin Jlu and Yangmei Chemical
Assuming the 90 days trading horizon Jilin Jlu Communication is expected to generate 1.17 times more return on investment than Yangmei Chemical. However, Jilin Jlu is 1.17 times more volatile than Yangmei Chemical Co. It trades about 0.01 of its potential returns per unit of risk. Yangmei Chemical Co is currently generating about -0.02 per unit of risk. If you would invest 879.00 in Jilin Jlu Communication on November 2, 2024 and sell it today you would lose (13.00) from holding Jilin Jlu Communication or give up 1.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jilin Jlu Communication vs. Yangmei Chemical Co
Performance |
| Timeline |
| Jilin Jlu Communication |
| Yangmei Chemical |
Jilin Jlu and Yangmei Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jilin Jlu and Yangmei Chemical
The main advantage of trading using opposite Jilin Jlu and Yangmei Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jilin Jlu position performs unexpectedly, Yangmei 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 Yangmei Chemical will offset losses from the drop in Yangmei Chemical's long position.| Jilin Jlu vs. Tonghua Grape Wine | Jilin Jlu vs. Zhongshan Public Utilities | Jilin Jlu vs. Southern PublishingMedia Co | Jilin Jlu vs. Northern United Publishing |
| Yangmei Chemical vs. Beijing Jiaman Dress | Yangmei Chemical vs. GRINM Semiconductor Materials | Yangmei Chemical vs. Zbit Semiconductor A | Yangmei Chemical vs. Union Semiconductor 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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