Correlation Between Ningbo Fangzheng and Dongfeng Automobile
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By analyzing existing cross correlation between Ningbo Fangzheng Automobile and Dongfeng Automobile Co, you can compare the effects of market volatilities on Ningbo Fangzheng 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 Ningbo Fangzheng with a short position of Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and Dongfeng Automobile.
Diversification Opportunities for Ningbo Fangzheng and Dongfeng Automobile
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Dongfeng is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile and Ningbo Fangzheng 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 Ningbo Fangzheng Automobile 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 Ningbo Fangzheng i.e., Ningbo Fangzheng and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Ningbo Fangzheng and Dongfeng Automobile
Assuming the 90 days trading horizon Ningbo Fangzheng is expected to generate 11.99 times less return on investment than Dongfeng Automobile. But when comparing it to its historical volatility, Ningbo Fangzheng Automobile is 1.28 times less risky than Dongfeng Automobile. It trades about 0.01 of its potential returns per unit of risk. Dongfeng Automobile Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 677.00 in Dongfeng Automobile Co on August 28, 2024 and sell it today you would earn a total of 59.00 from holding Dongfeng Automobile Co or generate 8.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Fangzheng Automobile vs. Dongfeng Automobile Co
Performance |
| Timeline |
| Ningbo Fangzheng Aut |
| Dongfeng Automobile |
Ningbo Fangzheng and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Fangzheng and Dongfeng Automobile
The main advantage of trading using opposite Ningbo Fangzheng and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng 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.| Ningbo Fangzheng vs. Loongson Technology Corp | Ningbo Fangzheng vs. Chongqing Road Bridge | Ningbo Fangzheng vs. Shenzhen Fortune Trend | Ningbo Fangzheng vs. Wuhan Xianglong Power |
| Dongfeng Automobile vs. Lutian Machinery Co | Dongfeng Automobile vs. China Longyuan Power | Dongfeng Automobile vs. Changshu Tongrun Auto | Dongfeng Automobile vs. PetroChina Co Ltd |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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