Correlation Between Jinan Acetate and Magnate Technology

Can any of the company-specific risk be diversified away by investing in both Jinan Acetate and Magnate Technology 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 Magnate Technology 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 Magnate Technology Co, you can compare the effects of market volatilities on Jinan Acetate and Magnate Technology 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 Magnate Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinan Acetate and Magnate Technology.

Diversification Opportunities for Jinan Acetate and Magnate Technology

0.56

Correlation Coefficient

Jinan Acetate  Magnate Technology

Very weak diversification

The 3 months correlation between Jinan and Magnate is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Jinan Acetate Chemical and Magnate Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnate Technology 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 Magnate Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnate Technology has no effect on the direction of Jinan Acetate i.e., Jinan Acetate and Magnate Technology go up and down completely randomly.

Pair Corralation between Jinan Acetate and Magnate Technology

Assuming the 90 days trading horizon Jinan Acetate is expected to generate 3.37 times less return on investment than Magnate Technology. But when comparing it to its historical volatility, Jinan Acetate Chemical is 1.2 times less risky than Magnate Technology. It trades about 0.05 of its potential returns per unit of risk. Magnate Technology Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  3,450  in Magnate Technology Co on December 22, 2024 and sell it today you would earn a total of  725.00  from holding Magnate Technology Co or generate 21.01% return on investment over 90 days.

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

Jinan Acetate Chemical  vs.  Magnate Technology 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 weak basic indicators, Jinan Acetate may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Magnate Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Magnate Technology Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Magnate Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jinan Acetate and Magnate Technology

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

The idea behind Jinan Acetate Chemical and Magnate Technology 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.