Correlation Between Dongbang Transport and Chin Yang
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and Chin Yang at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Dongbang Transport and Chin Yang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongbang Transport Logistics and Chin Yang Chemical, you can compare the effects of market volatilities on Dongbang Transport and Chin Yang 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 Dongbang Transport with a short position of Chin Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and Chin Yang.
Diversification Opportunities for Dongbang Transport and Chin Yang
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dongbang and Chin is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and Chin Yang Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chin Yang Chemical and Dongbang Transport 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 Dongbang Transport Logistics are associated (or correlated) with Chin Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chin Yang Chemical has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and Chin Yang go up and down completely randomly.
Pair Corralation between Dongbang Transport and Chin Yang
Assuming the 90 days trading horizon Dongbang Transport Logistics is expected to generate 1.45 times more return on investment than Chin Yang. However, Dongbang Transport is 1.45 times more volatile than Chin Yang Chemical. It trades about 0.01 of its potential returns per unit of risk. Chin Yang Chemical is currently generating about -0.02 per unit of risk. If you would invest 268,500 in Dongbang Transport Logistics on September 1, 2024 and sell it today you would lose (41,000) from holding Dongbang Transport Logistics or give up 15.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Transport Logistics vs. Chin Yang Chemical
Performance |
| Timeline |
| Dongbang Transport |
| Chin Yang Chemical |
Dongbang Transport and Chin Yang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and Chin Yang
The main advantage of trading using opposite Dongbang Transport and Chin Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, Chin Yang 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 Chin Yang will offset losses from the drop in Chin Yang's long position.| Dongbang Transport vs. Infinitt Healthcare Co | Dongbang Transport vs. LG Household Healthcare | Dongbang Transport vs. Cube Entertainment | Dongbang Transport vs. Digital Multimedia Technology |
| Chin Yang vs. AptaBio Therapeutics | Chin Yang vs. Daewoo SBI SPAC | Chin Yang vs. Dream Security co | Chin Yang vs. Microfriend |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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