Correlation Between Dongnan Electronics and Shanghai Ziyan
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By analyzing existing cross correlation between Dongnan Electronics Co and Shanghai Ziyan Foods, you can compare the effects of market volatilities on Dongnan Electronics and Shanghai Ziyan 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 Shanghai Ziyan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongnan Electronics and Shanghai Ziyan.
Diversification Opportunities for Dongnan Electronics and Shanghai Ziyan
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongnan and Shanghai is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Dongnan Electronics Co and Shanghai Ziyan Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Ziyan Foods 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 Shanghai Ziyan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Ziyan Foods has no effect on the direction of Dongnan Electronics i.e., Dongnan Electronics and Shanghai Ziyan go up and down completely randomly.
Pair Corralation between Dongnan Electronics and Shanghai Ziyan
Assuming the 90 days trading horizon Dongnan Electronics Co is expected to generate 1.64 times more return on investment than Shanghai Ziyan. However, Dongnan Electronics is 1.64 times more volatile than Shanghai Ziyan Foods. It trades about 0.11 of its potential returns per unit of risk. Shanghai Ziyan Foods is currently generating about 0.11 per unit of risk. If you would invest 1,903 in Dongnan Electronics Co on August 31, 2024 and sell it today you would earn a total of 536.00 from holding Dongnan Electronics Co or generate 28.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongnan Electronics Co vs. Shanghai Ziyan Foods
Performance |
| Timeline |
| Dongnan Electronics |
| Shanghai Ziyan Foods |
Dongnan Electronics and Shanghai Ziyan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongnan Electronics and Shanghai Ziyan
The main advantage of trading using opposite Dongnan Electronics and Shanghai Ziyan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongnan Electronics position performs unexpectedly, Shanghai Ziyan 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 Shanghai Ziyan will offset losses from the drop in Shanghai Ziyan's long position.| Dongnan Electronics vs. Cultural Investment Holdings | Dongnan Electronics vs. Gome Telecom Equipment | Dongnan Electronics vs. Bus Online Co | Dongnan Electronics vs. Holitech Technology Co |
| Shanghai Ziyan vs. China State Construction | Shanghai Ziyan vs. China Merchants Shekou | Shanghai Ziyan vs. Huafa Industrial Co | Shanghai Ziyan vs. China International Capital |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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