Correlation Between Dongnan Electronics and Changsha Jingjia
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By analyzing existing cross correlation between Dongnan Electronics Co and Changsha Jingjia Microelectronics, you can compare the effects of market volatilities on Dongnan Electronics and Changsha Jingjia 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 Changsha Jingjia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongnan Electronics and Changsha Jingjia.
Diversification Opportunities for Dongnan Electronics and Changsha Jingjia
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dongnan and Changsha is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dongnan Electronics Co and Changsha Jingjia Microelectron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changsha Jingjia Mic 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 Changsha Jingjia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changsha Jingjia Mic has no effect on the direction of Dongnan Electronics i.e., Dongnan Electronics and Changsha Jingjia go up and down completely randomly.
Pair Corralation between Dongnan Electronics and Changsha Jingjia
Assuming the 90 days trading horizon Dongnan Electronics is expected to generate 1.27 times less return on investment than Changsha Jingjia. But when comparing it to its historical volatility, Dongnan Electronics Co is 1.12 times less risky than Changsha Jingjia. It trades about 0.02 of its potential returns per unit of risk. Changsha Jingjia Microelectronics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 8,241 in Changsha Jingjia Microelectronics on October 31, 2024 and sell it today you would lose (71.00) from holding Changsha Jingjia Microelectronics or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongnan Electronics Co vs. Changsha Jingjia Microelectron
Performance |
| Timeline |
| Dongnan Electronics |
| Changsha Jingjia Mic |
Dongnan Electronics and Changsha Jingjia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongnan Electronics and Changsha Jingjia
The main advantage of trading using opposite Dongnan Electronics and Changsha Jingjia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongnan Electronics position performs unexpectedly, Changsha Jingjia 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 Changsha Jingjia will offset losses from the drop in Changsha Jingjia's long position.| Dongnan Electronics vs. Industrial and Commercial | Dongnan Electronics vs. China Construction Bank | Dongnan Electronics vs. Bank of China | Dongnan Electronics vs. Agricultural Bank of |
| Changsha Jingjia vs. Guangzhou KingTeller Technology | Changsha Jingjia vs. Xinhua Winshare Publishing | Changsha Jingjia vs. Shandong Publishing Media | Changsha Jingjia vs. Uxi Unicomp Technology |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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