Correlation Between China Securities and Dongfang Electric
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By analyzing existing cross correlation between China Securities 800 and Dongfang Electric Corp, you can compare the effects of market volatilities on China Securities and Dongfang Electric 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 China Securities with a short position of Dongfang Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Dongfang Electric.
Diversification Opportunities for China Securities and Dongfang Electric
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Dongfang is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Dongfang Electric Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfang Electric Corp and China Securities 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 China Securities 800 are associated (or correlated) with Dongfang Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongfang Electric Corp has no effect on the direction of China Securities i.e., China Securities and Dongfang Electric go up and down completely randomly.
Pair Corralation between China Securities and Dongfang Electric
Assuming the 90 days trading horizon China Securities 800 is expected to generate 0.85 times more return on investment than Dongfang Electric. However, China Securities 800 is 1.18 times less risky than Dongfang Electric. It trades about 0.15 of its potential returns per unit of risk. Dongfang Electric Corp is currently generating about 0.09 per unit of risk. If you would invest 346,857 in China Securities 800 on August 31, 2024 and sell it today you would earn a total of 72,947 from holding China Securities 800 or generate 21.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.28% |
| Values | Daily Returns |
China Securities 800 vs. Dongfang Electric Corp
Performance |
| Timeline |
China Securities and Dongfang Electric Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Dongfang Electric Corp
Pair trading matchups for Dongfang Electric
Pair Trading with China Securities and Dongfang Electric
The main advantage of trading using opposite China Securities and Dongfang Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Dongfang Electric 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 Dongfang Electric will offset losses from the drop in Dongfang Electric's long position.| China Securities vs. Sinofibers Technology Co | China Securities vs. Anji Foodstuff Co | China Securities vs. Niutech Environment Technology | China Securities vs. Linewell Software Co |
| Dongfang Electric vs. Digital China Information | Dongfang Electric vs. Hangzhou Gisway Information | Dongfang Electric vs. China Marine Information | Dongfang Electric vs. Shenzhen Clou Electronics |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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