Correlation Between Shenzhen Glory and Dongfeng Automobile
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By analyzing existing cross correlation between Shenzhen Glory Medical and Dongfeng Automobile Co, you can compare the effects of market volatilities on Shenzhen Glory 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 Shenzhen Glory with a short position of Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Glory and Dongfeng Automobile.
Diversification Opportunities for Shenzhen Glory and Dongfeng Automobile
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Dongfeng is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Glory Medical and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile and Shenzhen Glory 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 Shenzhen Glory Medical 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 Shenzhen Glory i.e., Shenzhen Glory and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Shenzhen Glory and Dongfeng Automobile
Assuming the 90 days trading horizon Shenzhen Glory Medical is expected to under-perform the Dongfeng Automobile. But the stock apears to be less risky and, when comparing its historical volatility, Shenzhen Glory Medical is 1.25 times less risky than Dongfeng Automobile. The stock trades about -0.4 of its potential returns per unit of risk. The Dongfeng Automobile Co is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 783.00 in Dongfeng Automobile Co on October 12, 2024 and sell it today you would lose (100.00) from holding Dongfeng Automobile Co or give up 12.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Glory Medical vs. Dongfeng Automobile Co
Performance |
| Timeline |
| Shenzhen Glory Medical |
| Dongfeng Automobile |
Shenzhen Glory and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Glory and Dongfeng Automobile
The main advantage of trading using opposite Shenzhen Glory and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Glory 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.| Shenzhen Glory vs. Anhui Shiny Electronic | Shenzhen Glory vs. Aurora Optoelectronics Co | Shenzhen Glory vs. Semiconductor Manufacturing Electronics | Shenzhen Glory vs. Success Electronics |
| Dongfeng Automobile vs. Xiangyu Medical Co | Dongfeng Automobile vs. Kontour Medical Technology | Dongfeng Automobile vs. Chinese Universe Publishing | Dongfeng Automobile vs. Shenzhen Glory Medical |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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