Correlation Between Double Bond and DingZing Advanced
Can any of the company-specific risk be diversified away by investing in both Double Bond and DingZing Advanced at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Double Bond and DingZing Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Double Bond Chemical and DingZing Advanced Materials, you can compare the effects of market volatilities on Double Bond and DingZing Advanced 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 Double Bond with a short position of DingZing Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Double Bond and DingZing Advanced.
Diversification Opportunities for Double Bond and DingZing Advanced
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Double and DingZing is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Double Bond Chemical and DingZing Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DingZing Advanced and Double Bond 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 Double Bond Chemical are associated (or correlated) with DingZing Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DingZing Advanced has no effect on the direction of Double Bond i.e., Double Bond and DingZing Advanced go up and down completely randomly.
Pair Corralation between Double Bond and DingZing Advanced
Assuming the 90 days trading horizon Double Bond Chemical is expected to under-perform the DingZing Advanced. But the stock apears to be less risky and, when comparing its historical volatility, Double Bond Chemical is 2.15 times less risky than DingZing Advanced. The stock trades about -0.01 of its potential returns per unit of risk. The DingZing Advanced Materials is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5,136 in DingZing Advanced Materials on October 11, 2024 and sell it today you would earn a total of 9,914 from holding DingZing Advanced Materials or generate 193.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Double Bond Chemical vs. DingZing Advanced Materials
Performance |
| Timeline |
| Double Bond Chemical |
| DingZing Advanced |
Double Bond and DingZing Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Double Bond and DingZing Advanced
The main advantage of trading using opposite Double Bond and DingZing Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Double Bond position performs unexpectedly, DingZing Advanced 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 DingZing Advanced will offset losses from the drop in DingZing Advanced's long position.| Double Bond vs. Coremax Corp | Double Bond vs. Taiwan Hopax Chemsistry | Double Bond vs. Delta Electronics | Double Bond vs. China Steel Chemical |
| DingZing Advanced vs. Hsinli Chemical Industrial | DingZing Advanced vs. Acelon Chemicals Fiber | DingZing Advanced vs. Evermore Chemical Industry | DingZing Advanced vs. Double Bond Chemical |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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