Correlation Between Dongnan Electronics and Guangdong Tianhe
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By analyzing existing cross correlation between Dongnan Electronics Co and Guangdong Tianhe Agricultural, you can compare the effects of market volatilities on Dongnan Electronics and Guangdong Tianhe 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 Dongnan Electronics with a short position of Guangdong Tianhe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongnan Electronics and Guangdong Tianhe.
Diversification Opportunities for Dongnan Electronics and Guangdong Tianhe
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongnan and Guangdong is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Dongnan Electronics Co and Guangdong Tianhe Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Tianhe Agr and Dongnan Electronics 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 Dongnan Electronics Co are associated (or correlated) with Guangdong Tianhe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Tianhe Agr has no effect on the direction of Dongnan Electronics i.e., Dongnan Electronics and Guangdong Tianhe go up and down completely randomly.
Pair Corralation between Dongnan Electronics and Guangdong Tianhe
Assuming the 90 days trading horizon Dongnan Electronics Co is expected to generate 1.1 times more return on investment than Guangdong Tianhe. However, Dongnan Electronics is 1.1 times more volatile than Guangdong Tianhe Agricultural. It trades about -0.28 of its potential returns per unit of risk. Guangdong Tianhe Agricultural is currently generating about -0.42 per unit of risk. If you would invest 2,525 in Dongnan Electronics Co on October 15, 2024 and sell it today you would lose (430.00) from holding Dongnan Electronics Co or give up 17.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongnan Electronics Co vs. Guangdong Tianhe Agricultural
Performance |
| Timeline |
| Dongnan Electronics |
| Guangdong Tianhe Agr |
Dongnan Electronics and Guangdong Tianhe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongnan Electronics and Guangdong Tianhe
The main advantage of trading using opposite Dongnan Electronics and Guangdong Tianhe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongnan Electronics position performs unexpectedly, Guangdong Tianhe 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 Guangdong Tianhe will offset losses from the drop in Guangdong Tianhe's long position.| Dongnan Electronics vs. Shenyang Chemical Industry | Dongnan Electronics vs. Impulse Qingdao Health | Dongnan Electronics vs. Longxing Chemical Stock | Dongnan Electronics vs. Guangzhou Jointas Chemical |
| Guangdong Tianhe vs. Penyao Environmental Protection | Guangdong Tianhe vs. GreenTech Environmental Co | Guangdong Tianhe vs. Zoy Home Furnishing | Guangdong Tianhe vs. Fujian Nanwang Environment |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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