Correlation Between Jinli Group and Shinih Enterprise
Can any of the company-specific risk be diversified away by investing in both Jinli Group and Shinih Enterprise 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 Jinli Group and Shinih Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jinli Group Holdings and Shinih Enterprise Co, you can compare the effects of market volatilities on Jinli Group and Shinih Enterprise 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 Jinli Group with a short position of Shinih Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinli Group and Shinih Enterprise.
Diversification Opportunities for Jinli Group and Shinih Enterprise
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jinli and Shinih is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Jinli Group Holdings and Shinih Enterprise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinih Enterprise and Jinli Group 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 Jinli Group Holdings are associated (or correlated) with Shinih Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinih Enterprise has no effect on the direction of Jinli Group i.e., Jinli Group and Shinih Enterprise go up and down completely randomly.
Pair Corralation between Jinli Group and Shinih Enterprise
Assuming the 90 days trading horizon Jinli Group Holdings is expected to generate 6.97 times more return on investment than Shinih Enterprise. However, Jinli Group is 6.97 times more volatile than Shinih Enterprise Co. It trades about 0.3 of its potential returns per unit of risk. Shinih Enterprise Co is currently generating about -0.17 per unit of risk. If you would invest 1,075 in Jinli Group Holdings on September 12, 2024 and sell it today you would earn a total of 235.00 from holding Jinli Group Holdings or generate 21.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinli Group Holdings vs. Shinih Enterprise Co
Performance |
| Timeline |
| Jinli Group Holdings |
| Shinih Enterprise |
Jinli Group and Shinih Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinli Group and Shinih Enterprise
The main advantage of trading using opposite Jinli Group and Shinih Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinli Group position performs unexpectedly, Shinih Enterprise 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 Shinih Enterprise will offset losses from the drop in Shinih Enterprise's long position.| Jinli Group vs. Shui Mu International Co | Jinli Group vs. Les Enphants Co | Jinli Group vs. Victory New Materials | Jinli Group vs. Shinih Enterprise Co |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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