Correlation Between Dongnan Electronics and Nantong Haixing
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By analyzing existing cross correlation between Dongnan Electronics Co and Nantong Haixing Electronics, you can compare the effects of market volatilities on Dongnan Electronics and Nantong Haixing 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 Nantong Haixing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongnan Electronics and Nantong Haixing.
Diversification Opportunities for Dongnan Electronics and Nantong Haixing
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dongnan and Nantong is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Dongnan Electronics Co and Nantong Haixing Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nantong Haixing Elec 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 Nantong Haixing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nantong Haixing Elec has no effect on the direction of Dongnan Electronics i.e., Dongnan Electronics and Nantong Haixing go up and down completely randomly.
Pair Corralation between Dongnan Electronics and Nantong Haixing
Assuming the 90 days trading horizon Dongnan Electronics Co is expected to generate 3.11 times more return on investment than Nantong Haixing. However, Dongnan Electronics is 3.11 times more volatile than Nantong Haixing Electronics. It trades about 0.03 of its potential returns per unit of risk. Nantong Haixing Electronics is currently generating about -0.08 per unit of risk. If you would invest 2,403 in Dongnan Electronics Co on August 29, 2024 and sell it today you would earn a total of 21.00 from holding Dongnan Electronics Co or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongnan Electronics Co vs. Nantong Haixing Electronics
Performance |
| Timeline |
| Dongnan Electronics |
| Nantong Haixing Elec |
Dongnan Electronics and Nantong Haixing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongnan Electronics and Nantong Haixing
The main advantage of trading using opposite Dongnan Electronics and Nantong Haixing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongnan Electronics position performs unexpectedly, Nantong Haixing 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 Nantong Haixing will offset losses from the drop in Nantong Haixing's long position.| Dongnan Electronics vs. PetroChina Co Ltd | Dongnan Electronics vs. China State Construction | Dongnan Electronics vs. China Mobile Limited | Dongnan Electronics vs. Industrial and Commercial |
| Nantong Haixing vs. PetroChina Co Ltd | Nantong Haixing vs. China State Construction | Nantong Haixing vs. China Mobile Limited | Nantong Haixing vs. Industrial and Commercial |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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