Correlation Between Jinan Acetate and Solid State
Can any of the company-specific risk be diversified away by investing in both Jinan Acetate and Solid State 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 Solid State 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 Solid State System, you can compare the effects of market volatilities on Jinan Acetate and Solid State 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 Solid State. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinan Acetate and Solid State.
Diversification Opportunities for Jinan Acetate and Solid State
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jinan and Solid is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Jinan Acetate Chemical and Solid State System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solid State System 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 Solid State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solid State System has no effect on the direction of Jinan Acetate i.e., Jinan Acetate and Solid State go up and down completely randomly.
Pair Corralation between Jinan Acetate and Solid State
Assuming the 90 days trading horizon Jinan Acetate Chemical is expected to generate 1.02 times more return on investment than Solid State. However, Jinan Acetate is 1.02 times more volatile than Solid State System. It trades about 0.04 of its potential returns per unit of risk. Solid State System is currently generating about -0.04 per unit of risk. If you would invest 78,100 in Jinan Acetate Chemical on September 14, 2024 and sell it today you would earn a total of 16,100 from holding Jinan Acetate Chemical or generate 20.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinan Acetate Chemical vs. Solid State System
Performance |
| Timeline |
| Jinan Acetate Chemical |
| Solid State System |
Jinan Acetate and Solid State Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinan Acetate and Solid State
The main advantage of trading using opposite Jinan Acetate and Solid State positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinan Acetate position performs unexpectedly, Solid State 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 Solid State will offset losses from the drop in Solid State's long position.| Jinan Acetate vs. Tainan Spinning Co | Jinan Acetate vs. Lealea Enterprise Co | Jinan Acetate vs. China Petrochemical Development | Jinan Acetate vs. Ruentex Development Co |
| Solid State vs. Chi Sheng Chemical | Solid State vs. Mechema Chemicals Int | Solid State vs. San Fu Chemical | Solid State vs. Johnson Chemical Pharmaceutical |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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