Correlation Between Jinan Acetate and Coremax Corp
Can any of the company-specific risk be diversified away by investing in both Jinan Acetate and Coremax Corp 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 Coremax Corp 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 Coremax Corp, you can compare the effects of market volatilities on Jinan Acetate and Coremax Corp 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 Coremax Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinan Acetate and Coremax Corp.
Diversification Opportunities for Jinan Acetate and Coremax Corp
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jinan and Coremax is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Jinan Acetate Chemical and Coremax Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coremax Corp 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 Coremax Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coremax Corp has no effect on the direction of Jinan Acetate i.e., Jinan Acetate and Coremax Corp go up and down completely randomly.
Pair Corralation between Jinan Acetate and Coremax Corp
Assuming the 90 days trading horizon Jinan Acetate Chemical is expected to under-perform the Coremax Corp. But the stock apears to be less risky and, when comparing its historical volatility, Jinan Acetate Chemical is 1.35 times less risky than Coremax Corp. The stock trades about -0.18 of its potential returns per unit of risk. The Coremax Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,400 in Coremax Corp on November 3, 2024 and sell it today you would earn a total of 50.00 from holding Coremax Corp or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinan Acetate Chemical vs. Coremax Corp
Performance |
| Timeline |
| Jinan Acetate Chemical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Coremax Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Jinan Acetate and Coremax Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinan Acetate and Coremax Corp
The main advantage of trading using opposite Jinan Acetate and Coremax Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinan Acetate position performs unexpectedly, Coremax Corp 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 Coremax Corp will offset losses from the drop in Coremax Corp's long position.The idea behind Jinan Acetate Chemical and Coremax Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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