Correlation Between Datavan International and Jinan Acetate
Can any of the company-specific risk be diversified away by investing in both Datavan International 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 Datavan International and Jinan Acetate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Datavan International and Jinan Acetate Chemical, you can compare the effects of market volatilities on Datavan International 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 Datavan International with a short position of Jinan Acetate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datavan International and Jinan Acetate.
Diversification Opportunities for Datavan International and Jinan Acetate
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Datavan and Jinan is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Datavan International 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 Datavan International 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 Datavan International 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 Datavan International i.e., Datavan International and Jinan Acetate go up and down completely randomly.
Pair Corralation between Datavan International and Jinan Acetate
Assuming the 90 days trading horizon Datavan International is expected to generate 2.48 times more return on investment than Jinan Acetate. However, Datavan International is 2.48 times more volatile than Jinan Acetate Chemical. It trades about 0.15 of its potential returns per unit of risk. Jinan Acetate Chemical is currently generating about 0.08 per unit of risk. If you would invest 1,780 in Datavan International on August 30, 2024 and sell it today you would earn a total of 210.00 from holding Datavan International or generate 11.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Datavan International vs. Jinan Acetate Chemical
Performance |
| Timeline |
| Datavan International |
| Jinan Acetate Chemical |
Datavan International and Jinan Acetate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datavan International and Jinan Acetate
The main advantage of trading using opposite Datavan International and Jinan Acetate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datavan International 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.| Datavan International vs. Fubon Financial Holding | Datavan International vs. Space Shuttle Hi Tech | Datavan International vs. SynCore Biotechnology Co | Datavan International vs. Shinkong Insurance Co |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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