Correlation Between Fujian Longzhou and Dongfeng Automobile
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Dongfeng Automobile Co, you can compare the effects of market volatilities on Fujian Longzhou 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 Fujian Longzhou with a short position of Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Dongfeng Automobile.
Diversification Opportunities for Fujian Longzhou and Dongfeng Automobile
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fujian and Dongfeng is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile and Fujian Longzhou 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 Fujian Longzhou Transportation 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 Fujian Longzhou i.e., Fujian Longzhou and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Dongfeng Automobile
Assuming the 90 days trading horizon Fujian Longzhou Transportation is expected to generate 1.06 times more return on investment than Dongfeng Automobile. However, Fujian Longzhou is 1.06 times more volatile than Dongfeng Automobile Co. It trades about 0.08 of its potential returns per unit of risk. Dongfeng Automobile Co is currently generating about -0.06 per unit of risk. If you would invest 393.00 in Fujian Longzhou Transportation on November 6, 2024 and sell it today you would earn a total of 12.00 from holding Fujian Longzhou Transportation or generate 3.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Longzhou Transportation vs. Dongfeng Automobile Co
Performance |
| Timeline |
| Fujian Longzhou Tran |
| Dongfeng Automobile |
Fujian Longzhou and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Dongfeng Automobile
The main advantage of trading using opposite Fujian Longzhou and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou 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.| Fujian Longzhou vs. Harbin Hatou Investment | Fujian Longzhou vs. Zoje Resources Investment | Fujian Longzhou vs. China Asset Management | Fujian Longzhou vs. Tieling Newcity Investment |
| Dongfeng Automobile vs. Easyhome New Retail | Dongfeng Automobile vs. CICC Fund Management | Dongfeng Automobile vs. Sanbo Hospital Management | Dongfeng Automobile vs. Xiangyu Medical 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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