Correlation Between Dongrui Food and New China
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By analyzing existing cross correlation between Dongrui Food Group and New China Life, you can compare the effects of market volatilities on Dongrui Food and New China 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 Dongrui Food with a short position of New China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongrui Food and New China.
Diversification Opportunities for Dongrui Food and New China
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongrui and New is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Dongrui Food Group and New China Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New China Life and Dongrui Food 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 Dongrui Food Group are associated (or correlated) with New China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New China Life has no effect on the direction of Dongrui Food i.e., Dongrui Food and New China go up and down completely randomly.
Pair Corralation between Dongrui Food and New China
Assuming the 90 days trading horizon Dongrui Food Group is expected to generate 0.71 times more return on investment than New China. However, Dongrui Food Group is 1.41 times less risky than New China. It trades about 0.04 of its potential returns per unit of risk. New China Life is currently generating about 0.01 per unit of risk. If you would invest 1,685 in Dongrui Food Group on September 14, 2024 and sell it today you would earn a total of 21.00 from holding Dongrui Food Group or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongrui Food Group vs. New China Life
Performance |
| Timeline |
| Dongrui Food Group |
| New China Life |
Dongrui Food and New China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongrui Food and New China
The main advantage of trading using opposite Dongrui Food and New China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongrui Food position performs unexpectedly, New China 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 New China will offset losses from the drop in New China's long position.| Dongrui Food vs. New China Life | Dongrui Food vs. Ming Yang Smart | Dongrui Food vs. 159681 | Dongrui Food vs. 159005 |
| New China vs. Fujian Nanwang Environment | New China vs. Guangdong Silvere Sci | New China vs. Huaibei Mining Holdings | New China vs. Guocheng Mining 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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