Correlation Between DR and SAIC
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By analyzing existing cross correlation between DR Limited and SAIC Motor Corp, you can compare the effects of market volatilities on DR and SAIC 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 DR with a short position of SAIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of DR and SAIC.
Diversification Opportunities for DR and SAIC
Poor diversification
The 3 months correlation between DR and SAIC is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding DR Limited and SAIC Motor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAIC Motor Corp and DR 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 DR Limited are associated (or correlated) with SAIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAIC Motor Corp has no effect on the direction of DR i.e., DR and SAIC go up and down completely randomly.
Pair Corralation between DR and SAIC
Assuming the 90 days trading horizon DR Limited is expected to under-perform the SAIC. But the stock apears to be less risky and, when comparing its historical volatility, DR Limited is 1.42 times less risky than SAIC. The stock trades about -0.08 of its potential returns per unit of risk. The SAIC Motor Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,837 in SAIC Motor Corp on September 27, 2024 and sell it today you would earn a total of 48.00 from holding SAIC Motor Corp or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DR Limited vs. SAIC Motor Corp
Performance |
| Timeline |
| DR Limited |
| SAIC Motor Corp |
DR and SAIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DR and SAIC
The main advantage of trading using opposite DR and SAIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DR position performs unexpectedly, SAIC 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 SAIC will offset losses from the drop in SAIC's long position.| DR vs. Agricultural Bank of | DR vs. Industrial and Commercial | DR vs. Bank of China | DR vs. China Construction Bank |
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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