Correlation Between Union Petrochemical and Jasmine International

Can any of the company-specific risk be diversified away by investing in both Union Petrochemical and Jasmine International 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 Union Petrochemical and Jasmine International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Union Petrochemical Public and Jasmine International Public, you can compare the effects of market volatilities on Union Petrochemical and Jasmine International 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 Union Petrochemical with a short position of Jasmine International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Petrochemical and Jasmine International.

Diversification Opportunities for Union Petrochemical and Jasmine International

0.75

Correlation Coefficient

Union Petrochemical  Jasmine International

Poor diversification

The 3 months correlation between Union and Jasmine is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Union Petrochemical Public and Jasmine International Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasmine International and Union Petrochemical 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 Union Petrochemical Public are associated (or correlated) with Jasmine International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasmine International has no effect on the direction of Union Petrochemical i.e., Union Petrochemical and Jasmine International go up and down completely randomly.

Pair Corralation between Union Petrochemical and Jasmine International

Assuming the 90 days trading horizon Union Petrochemical Public is expected to under-perform the Jasmine International. In addition to that, Union Petrochemical is 1.0 times more volatile than Jasmine International Public. It trades about -0.35 of its total potential returns per unit of risk. Jasmine International Public is currently generating about -0.14 per unit of volatility. If you would invest  252.00  in Jasmine International Public on October 10, 2024 and sell it today you would lose (42.00) from holding Jasmine International Public or give up 16.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.31%
Values	Daily Returns

Union Petrochemical Public  vs.  Jasmine International Public

Union Petrochemical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Union Petrochemical Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Jasmine International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jasmine International Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Union Petrochemical and Jasmine International

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

The idea behind Union Petrochemical Public and Jasmine International Public 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.