Correlation Between Xinxiang Chemical and Dongfeng Automobile
Specify exactly 2 symbols:
By analyzing existing cross correlation between Xinxiang Chemical Fiber and Dongfeng Automobile Co, you can compare the effects of market volatilities on Xinxiang Chemical 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 Xinxiang Chemical with a short position of Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinxiang Chemical and Dongfeng Automobile.
Diversification Opportunities for Xinxiang Chemical and Dongfeng Automobile
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xinxiang and Dongfeng is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Xinxiang Chemical Fiber and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile and Xinxiang Chemical 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 Xinxiang Chemical Fiber 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 Xinxiang Chemical i.e., Xinxiang Chemical and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Xinxiang Chemical and Dongfeng Automobile
Assuming the 90 days trading horizon Xinxiang Chemical Fiber is expected to generate 0.62 times more return on investment than Dongfeng Automobile. However, Xinxiang Chemical Fiber is 1.61 times less risky than Dongfeng Automobile. It trades about 0.32 of its potential returns per unit of risk. Dongfeng Automobile Co is currently generating about -0.06 per unit of risk. If you would invest 377.00 in Xinxiang Chemical Fiber on November 7, 2024 and sell it today you would earn a total of 33.00 from holding Xinxiang Chemical Fiber or generate 8.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinxiang Chemical Fiber vs. Dongfeng Automobile Co
Performance |
| Timeline |
| Xinxiang Chemical Fiber |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Dongfeng Automobile |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Xinxiang Chemical and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinxiang Chemical and Dongfeng Automobile
The main advantage of trading using opposite Xinxiang Chemical and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinxiang Chemical 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.The idea behind Xinxiang Chemical Fiber and Dongfeng Automobile Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |