Correlation Between Dongnan Electronics and Guangdong Marubi
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By analyzing existing cross correlation between Dongnan Electronics Co and Guangdong Marubi Biotechnology, you can compare the effects of market volatilities on Dongnan Electronics and Guangdong Marubi 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 Marubi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongnan Electronics and Guangdong Marubi.
Diversification Opportunities for Dongnan Electronics and Guangdong Marubi
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongnan and Guangdong is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Dongnan Electronics Co and Guangdong Marubi Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Marubi Bio 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 Marubi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Marubi Bio has no effect on the direction of Dongnan Electronics i.e., Dongnan Electronics and Guangdong Marubi go up and down completely randomly.
Pair Corralation between Dongnan Electronics and Guangdong Marubi
Assuming the 90 days trading horizon Dongnan Electronics Co is expected to under-perform the Guangdong Marubi. But the stock apears to be less risky and, when comparing its historical volatility, Dongnan Electronics Co is 1.21 times less risky than Guangdong Marubi. The stock trades about -0.05 of its potential returns per unit of risk. The Guangdong Marubi Biotechnology is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,117 in Guangdong Marubi Biotechnology on September 13, 2024 and sell it today you would earn a total of 115.00 from holding Guangdong Marubi Biotechnology or generate 3.69% 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. Guangdong Marubi Biotechnology
Performance |
| Timeline |
| Dongnan Electronics |
| Guangdong Marubi Bio |
Dongnan Electronics and Guangdong Marubi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongnan Electronics and Guangdong Marubi
The main advantage of trading using opposite Dongnan Electronics and Guangdong Marubi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongnan Electronics position performs unexpectedly, Guangdong Marubi 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 Marubi will offset losses from the drop in Guangdong Marubi's long position.| Dongnan Electronics vs. Mingchen Health Co | Dongnan Electronics vs. Shenzhen Silver Basis | Dongnan Electronics vs. Lotus Health Group | Dongnan Electronics vs. Hangzhou Coco Healthcare |
| Guangdong Marubi vs. Tongling Nonferrous Metals | Guangdong Marubi vs. Sino Platinum Metals Co | Guangdong Marubi vs. CITIC Metal Co | Guangdong Marubi vs. Zhongshan Public Utilities |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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