What is the only type of chemical signal that diffuses locally and affects nearby cells?

Paracrine signaling is a chemical signal that diffuses locally and affects nearby cells.

Paracrine signaling allows the cells to communicate and coordinate activities to the neighbor cells by passive diffusion in the extracellular fluid. It is used by nearly all cell types in the body.

Example of paracrine signaling is the chemical transmitted from nerve to muscles during muscle contraction.