Correlation Between Vanfund Urban and Dongfeng Automobile
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By analyzing existing cross correlation between Vanfund Urban Investment and Dongfeng Automobile Co, you can compare the effects of market volatilities on Vanfund Urban 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 Vanfund Urban with a short position of Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanfund Urban and Dongfeng Automobile.
Diversification Opportunities for Vanfund Urban and Dongfeng Automobile
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vanfund and Dongfeng is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Vanfund Urban Investment and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile and Vanfund Urban 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 Vanfund Urban Investment 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 Vanfund Urban i.e., Vanfund Urban and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Vanfund Urban and Dongfeng Automobile
Assuming the 90 days trading horizon Vanfund Urban Investment is expected to under-perform the Dongfeng Automobile. But the stock apears to be less risky and, when comparing its historical volatility, Vanfund Urban Investment is 1.63 times less risky than Dongfeng Automobile. The stock trades about -0.12 of its potential returns per unit of risk. The Dongfeng Automobile Co is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 654.00 in Dongfeng Automobile Co on September 4, 2024 and sell it today you would earn a total of 108.00 from holding Dongfeng Automobile Co or generate 16.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanfund Urban Investment vs. Dongfeng Automobile Co
Performance |
| Timeline |
| Vanfund Urban Investment |
| Dongfeng Automobile |
Vanfund Urban and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanfund Urban and Dongfeng Automobile
The main advantage of trading using opposite Vanfund Urban and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanfund Urban 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.| Vanfund Urban vs. Shenzhen SDG Information | Vanfund Urban vs. Nanjing OLO Home | Vanfund Urban vs. Westone Information Industry | Vanfund Urban vs. Xiamen Goldenhome Co |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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