Correlation Between Xiangyang Automobile and Dongfeng Automobile
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By analyzing existing cross correlation between Xiangyang Automobile Bearing and Dongfeng Automobile Co, you can compare the effects of market volatilities on Xiangyang Automobile 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 Xiangyang Automobile with a short position of Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiangyang Automobile and Dongfeng Automobile.
Diversification Opportunities for Xiangyang Automobile and Dongfeng Automobile
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xiangyang and Dongfeng is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Xiangyang Automobile Bearing and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile and Xiangyang Automobile 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 Xiangyang Automobile Bearing 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 Xiangyang Automobile i.e., Xiangyang Automobile and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Xiangyang Automobile and Dongfeng Automobile
Assuming the 90 days trading horizon Xiangyang Automobile Bearing is expected to generate 1.18 times more return on investment than Dongfeng Automobile. However, Xiangyang Automobile is 1.18 times more volatile than Dongfeng Automobile Co. It trades about 0.16 of its potential returns per unit of risk. Dongfeng Automobile Co is currently generating about 0.12 per unit of risk. If you would invest 421.00 in Xiangyang Automobile Bearing on August 28, 2024 and sell it today you would earn a total of 169.00 from holding Xiangyang Automobile Bearing or generate 40.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xiangyang Automobile Bearing vs. Dongfeng Automobile Co
Performance |
| Timeline |
| Xiangyang Automobile |
| Dongfeng Automobile |
Xiangyang Automobile and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiangyang Automobile and Dongfeng Automobile
The main advantage of trading using opposite Xiangyang Automobile and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiangyang Automobile 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.| Xiangyang Automobile vs. Loongson Technology Corp | Xiangyang Automobile vs. Chongqing Road Bridge | Xiangyang Automobile vs. Shenzhen Fortune Trend | Xiangyang Automobile vs. Wuhan Xianglong Power |
| Dongfeng Automobile vs. Lutian Machinery Co | Dongfeng Automobile vs. China Longyuan Power | Dongfeng Automobile vs. Changshu Tongrun Auto | Dongfeng Automobile vs. PetroChina Co Ltd |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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