Correlation Between Zotye Automobile and Dongfeng Automobile
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By analyzing existing cross correlation between Zotye Automobile Co and Dongfeng Automobile Co, you can compare the effects of market volatilities on Zotye 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 Zotye Automobile with a short position of Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zotye Automobile and Dongfeng Automobile.
Diversification Opportunities for Zotye Automobile and Dongfeng Automobile
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zotye and Dongfeng is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Zotye Automobile Co and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile and Zotye 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 Zotye Automobile Co 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 Zotye Automobile i.e., Zotye Automobile and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Zotye Automobile and Dongfeng Automobile
Assuming the 90 days trading horizon Zotye Automobile Co is expected to under-perform the Dongfeng Automobile. In addition to that, Zotye Automobile is 1.34 times more volatile than Dongfeng Automobile Co. It trades about -0.01 of its total potential returns per unit of risk. Dongfeng Automobile Co is currently generating about 0.03 per unit of volatility. If you would invest 568.00 in Dongfeng Automobile Co on August 31, 2024 and sell it today you would earn a total of 162.00 from holding Dongfeng Automobile Co or generate 28.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zotye Automobile Co vs. Dongfeng Automobile Co
Performance |
| Timeline |
| Zotye Automobile |
| Dongfeng Automobile |
Zotye Automobile and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zotye Automobile and Dongfeng Automobile
The main advantage of trading using opposite Zotye Automobile and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zotye 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.| Zotye Automobile vs. China State Construction | Zotye Automobile vs. China Merchants Shekou | Zotye Automobile vs. Huafa Industrial Co | Zotye Automobile vs. China International Capital |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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