Correlation Between Dirui Industrial and Dongxing Sec
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By analyzing existing cross correlation between Dirui Industrial Co and Dongxing Sec Co, you can compare the effects of market volatilities on Dirui Industrial and Dongxing Sec 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 Dirui Industrial with a short position of Dongxing Sec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dirui Industrial and Dongxing Sec.
Diversification Opportunities for Dirui Industrial and Dongxing Sec
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dirui and Dongxing is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Dirui Industrial Co and Dongxing Sec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongxing Sec and Dirui Industrial 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 Dirui Industrial Co are associated (or correlated) with Dongxing Sec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongxing Sec has no effect on the direction of Dirui Industrial i.e., Dirui Industrial and Dongxing Sec go up and down completely randomly.
Pair Corralation between Dirui Industrial and Dongxing Sec
Assuming the 90 days trading horizon Dirui Industrial Co is expected to under-perform the Dongxing Sec. In addition to that, Dirui Industrial is 1.27 times more volatile than Dongxing Sec Co. It trades about -0.08 of its total potential returns per unit of risk. Dongxing Sec Co is currently generating about 0.05 per unit of volatility. If you would invest 863.00 in Dongxing Sec Co on August 26, 2024 and sell it today you would earn a total of 245.00 from holding Dongxing Sec Co or generate 28.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dirui Industrial Co vs. Dongxing Sec Co
Performance |
| Timeline |
| Dirui Industrial |
| Dongxing Sec |
Dirui Industrial and Dongxing Sec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dirui Industrial and Dongxing Sec
The main advantage of trading using opposite Dirui Industrial and Dongxing Sec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dirui Industrial position performs unexpectedly, Dongxing Sec 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 Dongxing Sec will offset losses from the drop in Dongxing Sec's long position.| Dirui Industrial vs. Bank of China | Dirui Industrial vs. Kweichow Moutai Co | Dirui Industrial vs. PetroChina Co Ltd | Dirui Industrial vs. Bank of Communications |
| Dongxing Sec vs. Industrial and Commercial | Dongxing Sec vs. Agricultural Bank of | Dongxing Sec vs. China Construction Bank | Dongxing Sec vs. Bank of China |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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