Correlation Between Jinan Acetate and StShine Optical

Can any of the company-specific risk be diversified away by investing in both Jinan Acetate and StShine Optical 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 Jinan Acetate and StShine Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jinan Acetate Chemical and StShine Optical Co, you can compare the effects of market volatilities on Jinan Acetate and StShine Optical 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 Jinan Acetate with a short position of StShine Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinan Acetate and StShine Optical.

Diversification Opportunities for Jinan Acetate and StShine Optical

0.1

Correlation Coefficient

Jinan Acetate  StShine Optical

Average diversification

The 3 months correlation between Jinan and StShine is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Jinan Acetate Chemical and StShine Optical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StShine Optical and Jinan Acetate 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 Jinan Acetate Chemical are associated (or correlated) with StShine Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StShine Optical has no effect on the direction of Jinan Acetate i.e., Jinan Acetate and StShine Optical go up and down completely randomly.

Pair Corralation between Jinan Acetate and StShine Optical

Assuming the 90 days trading horizon Jinan Acetate Chemical is expected to generate 2.18 times more return on investment than StShine Optical. However, Jinan Acetate is 2.18 times more volatile than StShine Optical Co. It trades about 0.04 of its potential returns per unit of risk. StShine Optical Co is currently generating about 0.0 per unit of risk. If you would invest  88,500  in Jinan Acetate Chemical on December 28, 2024 and sell it today you would earn a total of  3,800  from holding Jinan Acetate Chemical or generate 4.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Jinan Acetate Chemical  vs.  StShine Optical Co

Jinan Acetate Chemical

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jinan Acetate Chemical are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Jinan Acetate may actually be approaching a critical reversion point that can send shares even higher in April 2025.

StShine Optical

Risk-Adjusted Performance

Very Weak

Over the last 90 days StShine Optical Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, StShine Optical is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Jinan Acetate and StShine Optical

The main advantage of trading using opposite Jinan Acetate and StShine Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinan Acetate position performs unexpectedly, StShine Optical 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 StShine Optical will offset losses from the drop in StShine Optical's long position.

The idea behind Jinan Acetate Chemical and StShine Optical Co 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.

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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 Stocks Directory module to find actively traded stocks across global markets.