Correlation Between Ton Yi and Jinli Group
Can any of the company-specific risk be diversified away by investing in both Ton Yi and Jinli Group 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 Ton Yi and Jinli Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ton Yi Industrial and Jinli Group Holdings, you can compare the effects of market volatilities on Ton Yi and Jinli Group 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 Ton Yi with a short position of Jinli Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ton Yi and Jinli Group.
Diversification Opportunities for Ton Yi and Jinli Group
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ton and Jinli is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Ton Yi Industrial and Jinli Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinli Group Holdings and Ton Yi 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 Ton Yi Industrial are associated (or correlated) with Jinli Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinli Group Holdings has no effect on the direction of Ton Yi i.e., Ton Yi and Jinli Group go up and down completely randomly.
Pair Corralation between Ton Yi and Jinli Group
Assuming the 90 days trading horizon Ton Yi Industrial is expected to under-perform the Jinli Group. But the stock apears to be less risky and, when comparing its historical volatility, Ton Yi Industrial is 1.35 times less risky than Jinli Group. The stock trades about -0.01 of its potential returns per unit of risk. The Jinli Group Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,120 in Jinli Group Holdings on September 3, 2024 and sell it today you would earn a total of 235.00 from holding Jinli Group Holdings or generate 20.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ton Yi Industrial vs. Jinli Group Holdings
Performance |
| Timeline |
| Ton Yi Industrial |
| Jinli Group Holdings |
Ton Yi and Jinli Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ton Yi and Jinli Group
The main advantage of trading using opposite Ton Yi and Jinli Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ton Yi position performs unexpectedly, Jinli Group 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 Jinli Group will offset losses from the drop in Jinli Group's long position.The idea behind Ton Yi Industrial and Jinli Group Holdings 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.| 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 |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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