Correlation Between Jinan Acetate and Joinsoon Electronics
Can any of the company-specific risk be diversified away by investing in both Jinan Acetate and Joinsoon Electronics 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 Joinsoon Electronics 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 Joinsoon Electronics MFG, you can compare the effects of market volatilities on Jinan Acetate and Joinsoon Electronics 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 Joinsoon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinan Acetate and Joinsoon Electronics.
Diversification Opportunities for Jinan Acetate and Joinsoon Electronics
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jinan and Joinsoon is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Jinan Acetate Chemical and Joinsoon Electronics MFG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joinsoon Electronics MFG 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 Joinsoon Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joinsoon Electronics MFG has no effect on the direction of Jinan Acetate i.e., Jinan Acetate and Joinsoon Electronics go up and down completely randomly.
Pair Corralation between Jinan Acetate and Joinsoon Electronics
Assuming the 90 days trading horizon Jinan Acetate is expected to generate 1.0 times less return on investment than Joinsoon Electronics. In addition to that, Jinan Acetate is 1.16 times more volatile than Joinsoon Electronics MFG. It trades about 0.31 of its total potential returns per unit of risk. Joinsoon Electronics MFG is currently generating about 0.36 per unit of volatility. If you would invest 1,700 in Joinsoon Electronics MFG on December 1, 2024 and sell it today you would earn a total of 160.00 from holding Joinsoon Electronics MFG or generate 9.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinan Acetate Chemical vs. Joinsoon Electronics MFG
Performance |
| Timeline |
| Jinan Acetate Chemical |
| Joinsoon Electronics MFG |
Jinan Acetate and Joinsoon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinan Acetate and Joinsoon Electronics
The main advantage of trading using opposite Jinan Acetate and Joinsoon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinan Acetate position performs unexpectedly, Joinsoon Electronics 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 Joinsoon Electronics will offset losses from the drop in Joinsoon Electronics' long position.| Jinan Acetate vs. Chung Hwa Chemical | Jinan Acetate vs. China Man Made Fiber | Jinan Acetate vs. Sesoda Corp | Jinan Acetate vs. Everlight Chemical Industrial |
| Joinsoon Electronics vs. Everlight Electronics Co | Joinsoon Electronics vs. Yuanta Financial Holdings | Joinsoon Electronics vs. Unitech Electronics Co | Joinsoon Electronics vs. Microelectronics Technology |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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