Correlation Between Dongjiang Environmental and GreenTech Environmental
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By analyzing existing cross correlation between Dongjiang Environmental Co and GreenTech Environmental Co, you can compare the effects of market volatilities on Dongjiang Environmental and GreenTech Environmental 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 GreenTech Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongjiang Environmental and GreenTech Environmental.
Diversification Opportunities for Dongjiang Environmental and GreenTech Environmental
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dongjiang and GreenTech is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Dongjiang Environmental Co and GreenTech Environmental Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenTech Environmental 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 GreenTech Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenTech Environmental has no effect on the direction of Dongjiang Environmental i.e., Dongjiang Environmental and GreenTech Environmental go up and down completely randomly.
Pair Corralation between Dongjiang Environmental and GreenTech Environmental
Assuming the 90 days trading horizon Dongjiang Environmental Co is expected to under-perform the GreenTech Environmental. But the stock apears to be less risky and, when comparing its historical volatility, Dongjiang Environmental Co is 2.41 times less risky than GreenTech Environmental. The stock trades about -0.07 of its potential returns per unit of risk. The GreenTech Environmental Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,357 in GreenTech Environmental Co on August 31, 2024 and sell it today you would earn a total of 218.00 from holding GreenTech Environmental Co or generate 16.06% 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. GreenTech Environmental Co
Performance |
| Timeline |
| Dongjiang Environmental |
| GreenTech Environmental |
Dongjiang Environmental and GreenTech Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongjiang Environmental and GreenTech Environmental
The main advantage of trading using opposite Dongjiang Environmental and GreenTech Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongjiang Environmental position performs unexpectedly, GreenTech Environmental 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 GreenTech Environmental will offset losses from the drop in GreenTech Environmental's long position.| Dongjiang Environmental vs. Cultural Investment Holdings | Dongjiang Environmental vs. Gome Telecom Equipment | Dongjiang Environmental vs. Bus Online Co | Dongjiang Environmental vs. Holitech Technology Co |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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