Correlation Between Dongjiang Environmental and China World
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By analyzing existing cross correlation between Dongjiang Environmental Co and China World Trade, you can compare the effects of market volatilities on Dongjiang Environmental and China World 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 Dongjiang Environmental with a short position of China World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongjiang Environmental and China World.
Diversification Opportunities for Dongjiang Environmental and China World
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dongjiang and China is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dongjiang Environmental Co and China World Trade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China World Trade and Dongjiang Environmental 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 Dongjiang Environmental Co are associated (or correlated) with China World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China World Trade has no effect on the direction of Dongjiang Environmental i.e., Dongjiang Environmental and China World go up and down completely randomly.
Pair Corralation between Dongjiang Environmental and China World
Assuming the 90 days trading horizon Dongjiang Environmental Co is expected to under-perform the China World. In addition to that, Dongjiang Environmental is 1.71 times more volatile than China World Trade. It trades about -0.2 of its total potential returns per unit of risk. China World Trade is currently generating about -0.21 per unit of volatility. If you would invest 2,365 in China World Trade on August 28, 2024 and sell it today you would lose (137.00) from holding China World Trade or give up 5.79% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Dongjiang Environmental Co vs. China World Trade
Performance |
Timeline |
Dongjiang Environmental |
China World Trade |
Dongjiang Environmental and China World Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dongjiang Environmental and China World
The main advantage of trading using opposite Dongjiang Environmental and China World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongjiang Environmental position performs unexpectedly, China World 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 China World will offset losses from the drop in China World's long position.Dongjiang Environmental vs. China Petroleum Chemical | Dongjiang Environmental vs. PetroChina Co Ltd | Dongjiang Environmental vs. China State Construction | Dongjiang Environmental vs. China Railway Group |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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