Correlation Between Hunan Mendale and Dongfeng Automobile
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By analyzing existing cross correlation between Hunan Mendale Hometextile and Dongfeng Automobile Co, you can compare the effects of market volatilities on Hunan Mendale 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 Hunan Mendale with a short position of Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Mendale and Dongfeng Automobile.
Diversification Opportunities for Hunan Mendale and Dongfeng Automobile
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hunan and Dongfeng is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Mendale Hometextile and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile and Hunan Mendale 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 Hunan Mendale Hometextile 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 Hunan Mendale i.e., Hunan Mendale and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Hunan Mendale and Dongfeng Automobile
Assuming the 90 days trading horizon Hunan Mendale Hometextile is expected to under-perform the Dongfeng Automobile. In addition to that, Hunan Mendale is 1.07 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 0.02 per unit of volatility. If you would invest 591.00 in Dongfeng Automobile Co on October 14, 2024 and sell it today you would earn a total of 66.00 from holding Dongfeng Automobile Co or generate 11.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunan Mendale Hometextile vs. Dongfeng Automobile Co
Performance |
| Timeline |
| Hunan Mendale Hometextile |
| Dongfeng Automobile |
Hunan Mendale and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan Mendale and Dongfeng Automobile
The main advantage of trading using opposite Hunan Mendale and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Mendale 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.| Hunan Mendale vs. BYD Co Ltd | Hunan Mendale vs. China Mobile Limited | Hunan Mendale vs. Agricultural Bank of | Hunan Mendale vs. Industrial and Commercial |
| Dongfeng Automobile vs. Jiangsu Yueda Investment | Dongfeng Automobile vs. Hunan Mendale Hometextile | Dongfeng Automobile vs. Zoy Home Furnishing | Dongfeng Automobile vs. Markor International Home |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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