Correlation Between Jinan Acetate and Shiny Chemical
Can any of the company-specific risk be diversified away by investing in both Jinan Acetate and Shiny Chemical 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 Jinan Acetate and Shiny Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jinan Acetate Chemical and Shiny Chemical Industrial, you can compare the effects of market volatilities on Jinan Acetate and Shiny 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 Jinan Acetate with a short position of Shiny Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinan Acetate and Shiny Chemical.
Diversification Opportunities for Jinan Acetate and Shiny Chemical
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jinan and Shiny is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Jinan Acetate Chemical and Shiny Chemical Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shiny Chemical Industrial and Jinan Acetate 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 Jinan Acetate Chemical are associated (or correlated) with Shiny Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shiny Chemical Industrial has no effect on the direction of Jinan Acetate i.e., Jinan Acetate and Shiny Chemical go up and down completely randomly.
Pair Corralation between Jinan Acetate and Shiny Chemical
Assuming the 90 days trading horizon Jinan Acetate Chemical is expected to generate 0.86 times more return on investment than Shiny Chemical. However, Jinan Acetate Chemical is 1.16 times less risky than Shiny Chemical. It trades about -0.06 of its potential returns per unit of risk. Shiny Chemical Industrial is currently generating about -0.17 per unit of risk. If you would invest 87,300 in Jinan Acetate Chemical on August 26, 2024 and sell it today you would lose (2,000) from holding Jinan Acetate Chemical or give up 2.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinan Acetate Chemical vs. Shiny Chemical Industrial
Performance |
| Timeline |
| Jinan Acetate Chemical |
| Shiny Chemical Industrial |
Jinan Acetate and Shiny Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinan Acetate and Shiny Chemical
The main advantage of trading using opposite Jinan Acetate and Shiny Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinan Acetate position performs unexpectedly, Shiny 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 Shiny Chemical will offset losses from the drop in Shiny Chemical's long position.| Jinan Acetate vs. San Fu Chemical | Jinan Acetate vs. Tex Year Industries | Jinan Acetate vs. Concraft Holding Co | Jinan Acetate vs. Coremax Corp |
| Shiny Chemical vs. Cheng Shin Rubber | Shiny Chemical vs. Taiwan Cement Corp | Shiny Chemical vs. China Steel Chemical | Shiny Chemical vs. Yulon Motor 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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