Correlation Between Glodon Software and Dongfeng Automobile
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By analyzing existing cross correlation between Glodon Software Co and Dongfeng Automobile Co, you can compare the effects of market volatilities on Glodon Software 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 Glodon Software with a short position of Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glodon Software and Dongfeng Automobile.
Diversification Opportunities for Glodon Software and Dongfeng Automobile
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Glodon and Dongfeng is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Glodon Software 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 Glodon Software 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 Glodon Software 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 Glodon Software i.e., Glodon Software and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Glodon Software and Dongfeng Automobile
Assuming the 90 days trading horizon Glodon Software Co is expected to under-perform the Dongfeng Automobile. But the stock apears to be less risky and, when comparing its historical volatility, Glodon Software Co is 1.41 times less risky than Dongfeng Automobile. The stock trades about -0.12 of its potential returns per unit of risk. The Dongfeng Automobile Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 658.00 in Dongfeng Automobile Co on September 1, 2024 and sell it today you would earn a total of 78.00 from holding Dongfeng Automobile Co or generate 11.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glodon Software Co vs. Dongfeng Automobile Co
Performance |
| Timeline |
| Glodon Software |
| Dongfeng Automobile |
Glodon Software and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glodon Software and Dongfeng Automobile
The main advantage of trading using opposite Glodon Software and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glodon Software 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.| Glodon Software vs. Nexchip Semiconductor Corp | Glodon Software vs. GigaDevice SemiconductorBeiji | Glodon Software vs. Nanjing OLO Home | Glodon Software vs. Will Semiconductor Co |
| Dongfeng Automobile vs. China Life Insurance | Dongfeng Automobile vs. Cicc Fund Management | Dongfeng Automobile vs. Metro Investment Development | Dongfeng Automobile vs. Zhongrun Resources 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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