Correlation Between Shanghai Rongtai and Jilin Chemical
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By analyzing existing cross correlation between Shanghai Rongtai Health and Jilin Chemical Fibre, you can compare the effects of market volatilities on Shanghai Rongtai and Jilin Chemical 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 Shanghai Rongtai with a short position of Jilin Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Rongtai and Jilin Chemical.
Diversification Opportunities for Shanghai Rongtai and Jilin Chemical
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Jilin is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Rongtai Health and Jilin Chemical Fibre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jilin Chemical Fibre and Shanghai Rongtai 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 Shanghai Rongtai Health are associated (or correlated) with Jilin Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jilin Chemical Fibre has no effect on the direction of Shanghai Rongtai i.e., Shanghai Rongtai and Jilin Chemical go up and down completely randomly.
Pair Corralation between Shanghai Rongtai and Jilin Chemical
Assuming the 90 days trading horizon Shanghai Rongtai Health is expected to under-perform the Jilin Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Rongtai Health is 1.11 times less risky than Jilin Chemical. The stock trades about -0.02 of its potential returns per unit of risk. The Jilin Chemical Fibre is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 489.00 in Jilin Chemical Fibre on October 15, 2024 and sell it today you would lose (161.00) from holding Jilin Chemical Fibre or give up 32.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Rongtai Health vs. Jilin Chemical Fibre
Performance |
| Timeline |
| Shanghai Rongtai Health |
| Jilin Chemical Fibre |
Shanghai Rongtai and Jilin Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Rongtai and Jilin Chemical
The main advantage of trading using opposite Shanghai Rongtai and Jilin Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Rongtai position performs unexpectedly, Jilin Chemical 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 Chemical will offset losses from the drop in Jilin Chemical's long position.| Shanghai Rongtai vs. Hangzhou Minsheng Healthcare | Shanghai Rongtai vs. Fujian Boss Software | Shanghai Rongtai vs. Inspur Software Co | Shanghai Rongtai vs. Youngy Health Co |
| Jilin Chemical vs. Dezhan HealthCare Co | Jilin Chemical vs. Healthcare Co | Jilin Chemical vs. Shanghai Rongtai Health | Jilin Chemical vs. Iat Automobile Technology |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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