Correlation Between Dongjiang Environmental and China Sports
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By analyzing existing cross correlation between Dongjiang Environmental Co and China Sports Industry, you can compare the effects of market volatilities on Dongjiang Environmental and China Sports 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 Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongjiang Environmental and China Sports.
Diversification Opportunities for Dongjiang Environmental and China Sports
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dongjiang and China is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Dongjiang Environmental Co and China Sports Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Sports Industry 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 Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Sports Industry has no effect on the direction of Dongjiang Environmental i.e., Dongjiang Environmental and China Sports go up and down completely randomly.
Pair Corralation between Dongjiang Environmental and China Sports
Assuming the 90 days trading horizon Dongjiang Environmental Co is expected to under-perform the China Sports. In addition to that, Dongjiang Environmental is 1.27 times more volatile than China Sports Industry. It trades about -0.1 of its total potential returns per unit of risk. China Sports Industry is currently generating about 0.08 per unit of volatility. If you would invest 819.00 in China Sports Industry on September 1, 2024 and sell it today you would earn a total of 22.00 from holding China Sports Industry or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongjiang Environmental Co vs. China Sports Industry
Performance |
| Timeline |
| Dongjiang Environmental |
| China Sports Industry |
Dongjiang Environmental and China Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongjiang Environmental and China Sports
The main advantage of trading using opposite Dongjiang Environmental and China Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongjiang Environmental position performs unexpectedly, China Sports 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 Sports will offset losses from the drop in China Sports' long position.The idea behind Dongjiang Environmental Co and China Sports Industry pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| China Sports vs. Xinhua Winshare Publishing | China Sports vs. Jiangsu Jinling Sports | China Sports vs. Sportsoul Co Ltd | China Sports vs. China Publishing Media |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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