Correlation Between Jinan Acetate and M3 Technology
Can any of the company-specific risk be diversified away by investing in both Jinan Acetate and M3 Technology 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 M3 Technology 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 M3 Technology, you can compare the effects of market volatilities on Jinan Acetate and M3 Technology 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 M3 Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinan Acetate and M3 Technology.
Diversification Opportunities for Jinan Acetate and M3 Technology
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Jinan and 6799 is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Jinan Acetate Chemical and M3 Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M3 Technology 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 M3 Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M3 Technology has no effect on the direction of Jinan Acetate i.e., Jinan Acetate and M3 Technology go up and down completely randomly.
Pair Corralation between Jinan Acetate and M3 Technology
Assuming the 90 days trading horizon Jinan Acetate Chemical is expected to generate 0.69 times more return on investment than M3 Technology. However, Jinan Acetate Chemical is 1.45 times less risky than M3 Technology. It trades about 0.17 of its potential returns per unit of risk. M3 Technology is currently generating about -0.1 per unit of risk. If you would invest 84,800 in Jinan Acetate Chemical on September 4, 2024 and sell it today you would earn a total of 4,900 from holding Jinan Acetate Chemical or generate 5.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Jinan Acetate Chemical vs. M3 Technology
Performance |
| Timeline |
| Jinan Acetate Chemical |
| M3 Technology |
Jinan Acetate and M3 Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinan Acetate and M3 Technology
The main advantage of trading using opposite Jinan Acetate and M3 Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinan Acetate position performs unexpectedly, M3 Technology 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 M3 Technology will offset losses from the drop in M3 Technology'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 |
| M3 Technology vs. Shinkong Synthetic Fiber | M3 Technology vs. Jinan Acetate Chemical | M3 Technology vs. Mercuries Data Systems | M3 Technology vs. Double Bond Chemical |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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