Correlation Between Jinan Acetate and Phoenix Silicon
Can any of the company-specific risk be diversified away by investing in both Jinan Acetate and Phoenix Silicon 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 Phoenix Silicon 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 Phoenix Silicon International, you can compare the effects of market volatilities on Jinan Acetate and Phoenix Silicon 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 Phoenix Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinan Acetate and Phoenix Silicon.
Diversification Opportunities for Jinan Acetate and Phoenix Silicon
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jinan and Phoenix is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Jinan Acetate Chemical and Phoenix Silicon International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Silicon Inte 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 Phoenix Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Silicon Inte has no effect on the direction of Jinan Acetate i.e., Jinan Acetate and Phoenix Silicon go up and down completely randomly.
Pair Corralation between Jinan Acetate and Phoenix Silicon
Assuming the 90 days trading horizon Jinan Acetate Chemical is expected to generate 0.51 times more return on investment than Phoenix Silicon. However, Jinan Acetate Chemical is 1.97 times less risky than Phoenix Silicon. It trades about 0.0 of its potential returns per unit of risk. Phoenix Silicon International is currently generating about -0.02 per unit of risk. If you would invest 84,800 in Jinan Acetate Chemical on November 2, 2024 and sell it today you would lose (300.00) from holding Jinan Acetate Chemical or give up 0.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinan Acetate Chemical vs. Phoenix Silicon International
Performance |
| Timeline |
| Jinan Acetate Chemical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Phoenix Silicon Inte |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Jinan Acetate and Phoenix Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinan Acetate and Phoenix Silicon
The main advantage of trading using opposite Jinan Acetate and Phoenix Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinan Acetate position performs unexpectedly, Phoenix Silicon 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 Phoenix Silicon will offset losses from the drop in Phoenix Silicon's long position.The idea behind Jinan Acetate Chemical and Phoenix Silicon International 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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