Correlation Between Jiaozuo Wanfang and Dongfeng Automobile
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By analyzing existing cross correlation between Jiaozuo Wanfang Aluminum and Dongfeng Automobile Co, you can compare the effects of market volatilities on Jiaozuo Wanfang and Dongfeng Automobile 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 Jiaozuo Wanfang with a short position of Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiaozuo Wanfang and Dongfeng Automobile.
Diversification Opportunities for Jiaozuo Wanfang and Dongfeng Automobile
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiaozuo and Dongfeng is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Jiaozuo Wanfang Aluminum and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile and Jiaozuo Wanfang 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 Jiaozuo Wanfang Aluminum are associated (or correlated) with Dongfeng Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongfeng Automobile has no effect on the direction of Jiaozuo Wanfang i.e., Jiaozuo Wanfang and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Jiaozuo Wanfang and Dongfeng Automobile
Assuming the 90 days trading horizon Jiaozuo Wanfang Aluminum is expected to generate 0.67 times more return on investment than Dongfeng Automobile. However, Jiaozuo Wanfang Aluminum is 1.5 times less risky than Dongfeng Automobile. It trades about -0.06 of its potential returns per unit of risk. Dongfeng Automobile Co is currently generating about -0.07 per unit of risk. If you would invest 741.00 in Jiaozuo Wanfang Aluminum on September 13, 2024 and sell it today you would lose (25.00) from holding Jiaozuo Wanfang Aluminum or give up 3.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiaozuo Wanfang Aluminum vs. Dongfeng Automobile Co
Performance |
| Timeline |
| Jiaozuo Wanfang Aluminum |
| Dongfeng Automobile |
Jiaozuo Wanfang and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiaozuo Wanfang and Dongfeng Automobile
The main advantage of trading using opposite Jiaozuo Wanfang and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiaozuo Wanfang position performs unexpectedly, Dongfeng Automobile 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 Dongfeng Automobile will offset losses from the drop in Dongfeng Automobile's long position.| Jiaozuo Wanfang vs. Zijin Mining Group | Jiaozuo Wanfang vs. Wanhua Chemical Group | Jiaozuo Wanfang vs. Baoshan Iron Steel | Jiaozuo Wanfang vs. Shandong Gold Mining |
| Dongfeng Automobile vs. Guosheng Financial Holding | Dongfeng Automobile vs. Peoples Insurance of | Dongfeng Automobile vs. Zhongrun Resources Investment | Dongfeng Automobile vs. Shenwu Energy Saving |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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