Correlation Between Jinan Acetate and San Fu
Can any of the company-specific risk be diversified away by investing in both Jinan Acetate and San Fu 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 San Fu 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 San Fu Chemical, you can compare the effects of market volatilities on Jinan Acetate and San Fu 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 San Fu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinan Acetate and San Fu.
Diversification Opportunities for Jinan Acetate and San Fu
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jinan and San is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Jinan Acetate Chemical and San Fu Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Fu Chemical 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 San Fu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of San Fu Chemical has no effect on the direction of Jinan Acetate i.e., Jinan Acetate and San Fu go up and down completely randomly.
Pair Corralation between Jinan Acetate and San Fu
Assuming the 90 days trading horizon Jinan Acetate Chemical is expected to under-perform the San Fu. But the stock apears to be less risky and, when comparing its historical volatility, Jinan Acetate Chemical is 1.41 times less risky than San Fu. The stock trades about -0.31 of its potential returns per unit of risk. The San Fu Chemical is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest 13,150 in San Fu Chemical on October 23, 2024 and sell it today you would lose (950.00) from holding San Fu Chemical or give up 7.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinan Acetate Chemical vs. San Fu Chemical
Performance |
| Timeline |
| Jinan Acetate Chemical |
| San Fu Chemical |
Jinan Acetate and San Fu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinan Acetate and San Fu
The main advantage of trading using opposite Jinan Acetate and San Fu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinan Acetate position performs unexpectedly, San Fu 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 San Fu will offset losses from the drop in San Fu'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 |
| San Fu vs. Nuvoton Technology Corp | San Fu vs. Shiny Chemical Industrial | San Fu vs. Jinan Acetate Chemical | San Fu 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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