Correlation Between Danhua Chemical and Jilin Jlu
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By analyzing existing cross correlation between Danhua Chemical Technology and Jilin Jlu Communication, you can compare the effects of market volatilities on Danhua Chemical and Jilin Jlu 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 Danhua Chemical with a short position of Jilin Jlu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danhua Chemical and Jilin Jlu.
Diversification Opportunities for Danhua Chemical and Jilin Jlu
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Danhua and Jilin is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Danhua Chemical Technology and Jilin Jlu Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jilin Jlu Communication and Danhua Chemical 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 Danhua Chemical Technology are associated (or correlated) with Jilin Jlu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jilin Jlu Communication has no effect on the direction of Danhua Chemical i.e., Danhua Chemical and Jilin Jlu go up and down completely randomly.
Pair Corralation between Danhua Chemical and Jilin Jlu
Assuming the 90 days trading horizon Danhua Chemical Technology is expected to generate 1.1 times more return on investment than Jilin Jlu. However, Danhua Chemical is 1.1 times more volatile than Jilin Jlu Communication. It trades about 0.03 of its potential returns per unit of risk. Jilin Jlu Communication is currently generating about 0.03 per unit of risk. If you would invest 319.00 in Danhua Chemical Technology on September 14, 2024 and sell it today you would earn a total of 27.00 from holding Danhua Chemical Technology or generate 8.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.58% |
| Values | Daily Returns |
Danhua Chemical Technology vs. Jilin Jlu Communication
Performance |
| Timeline |
| Danhua Chemical Tech |
| Jilin Jlu Communication |
Danhua Chemical and Jilin Jlu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danhua Chemical and Jilin Jlu
The main advantage of trading using opposite Danhua Chemical and Jilin Jlu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danhua Chemical position performs unexpectedly, Jilin Jlu 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 Jilin Jlu will offset losses from the drop in Jilin Jlu's long position.| Danhua Chemical vs. Jiahe Foods Industry | Danhua Chemical vs. Zhejiang Kingland Pipeline | Danhua Chemical vs. Haima Automobile Group | Danhua Chemical vs. Jiangsu Xinri E Vehicle |
| Jilin Jlu vs. Lootom Telcovideo Network | Jilin Jlu vs. Hainan Haiqi Transportation | Jilin Jlu vs. China Sports Industry | Jilin Jlu vs. Unisplendour 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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