Correlation Between JINHUI SHIPPING and GOODYEAR T
Can any of the company-specific risk be diversified away by investing in both JINHUI SHIPPING and GOODYEAR T 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 JINHUI SHIPPING and GOODYEAR T into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JINHUI SHIPPING and GOODYEAR T RUBBER, you can compare the effects of market volatilities on JINHUI SHIPPING and GOODYEAR T 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 JINHUI SHIPPING with a short position of GOODYEAR T. Check out your portfolio center. Please also check ongoing floating volatility patterns of JINHUI SHIPPING and GOODYEAR T.
Diversification Opportunities for JINHUI SHIPPING and GOODYEAR T
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between JINHUI and GOODYEAR is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding JINHUI SHIPPING and GOODYEAR T RUBBER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOODYEAR T RUBBER and JINHUI SHIPPING 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 JINHUI SHIPPING are associated (or correlated) with GOODYEAR T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOODYEAR T RUBBER has no effect on the direction of JINHUI SHIPPING i.e., JINHUI SHIPPING and GOODYEAR T go up and down completely randomly.
Pair Corralation between JINHUI SHIPPING and GOODYEAR T
Assuming the 90 days trading horizon JINHUI SHIPPING is expected to generate 2.36 times less return on investment than GOODYEAR T. But when comparing it to its historical volatility, JINHUI SHIPPING is 1.61 times less risky than GOODYEAR T. It trades about 0.24 of its potential returns per unit of risk. GOODYEAR T RUBBER is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 774.00 in GOODYEAR T RUBBER on August 30, 2024 and sell it today you would earn a total of 231.00 from holding GOODYEAR T RUBBER or generate 29.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JINHUI SHIPPING vs. GOODYEAR T RUBBER
Performance |
| Timeline |
| JINHUI SHIPPING |
| GOODYEAR T RUBBER |
JINHUI SHIPPING and GOODYEAR T Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JINHUI SHIPPING and GOODYEAR T
The main advantage of trading using opposite JINHUI SHIPPING and GOODYEAR T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JINHUI SHIPPING position performs unexpectedly, GOODYEAR T 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 GOODYEAR T will offset losses from the drop in GOODYEAR T's long position.| JINHUI SHIPPING vs. WT OFFSHORE | JINHUI SHIPPING vs. THORNEY TECHS LTD | JINHUI SHIPPING vs. NXP Semiconductors NV | JINHUI SHIPPING vs. Taiwan Semiconductor Manufacturing |
| GOODYEAR T vs. Apple Inc | GOODYEAR T vs. Apple Inc | GOODYEAR T vs. Superior Plus Corp | GOODYEAR T vs. SIVERS SEMICONDUCTORS AB |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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