Correlation Between Guilin Seamild and Dongfeng Automobile
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By analyzing existing cross correlation between Guilin Seamild Foods and Dongfeng Automobile Co, you can compare the effects of market volatilities on Guilin Seamild 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 Guilin Seamild with a short position of Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guilin Seamild and Dongfeng Automobile.
Diversification Opportunities for Guilin Seamild and Dongfeng Automobile
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guilin and Dongfeng is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Guilin Seamild Foods and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile and Guilin Seamild 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 Guilin Seamild Foods 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 Guilin Seamild i.e., Guilin Seamild and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Guilin Seamild and Dongfeng Automobile
Assuming the 90 days trading horizon Guilin Seamild Foods is expected to generate 1.07 times more return on investment than Dongfeng Automobile. However, Guilin Seamild is 1.07 times more volatile than Dongfeng Automobile Co. It trades about 0.05 of its potential returns per unit of risk. Dongfeng Automobile Co is currently generating about -0.14 per unit of risk. If you would invest 1,524 in Guilin Seamild Foods on October 11, 2024 and sell it today you would earn a total of 48.00 from holding Guilin Seamild Foods or generate 3.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guilin Seamild Foods vs. Dongfeng Automobile Co
Performance |
| Timeline |
| Guilin Seamild Foods |
| Dongfeng Automobile |
Guilin Seamild and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guilin Seamild and Dongfeng Automobile
The main advantage of trading using opposite Guilin Seamild and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guilin Seamild 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.| Guilin Seamild vs. Beijing Kingsoft Office | Guilin Seamild vs. Fibocom Wireless | Guilin Seamild vs. Ningbo MedicalSystem Biotechnology | Guilin Seamild vs. Guangdong Marubi Biotechnology |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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