Correlation Between China Asset and Dongguan Tarry
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By analyzing existing cross correlation between China Asset Management and Dongguan Tarry Electronics, you can compare the effects of market volatilities on China Asset and Dongguan Tarry 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 China Asset with a short position of Dongguan Tarry. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Asset and Dongguan Tarry.
Diversification Opportunities for China Asset and Dongguan Tarry
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Dongguan is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding China Asset Management and Dongguan Tarry Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongguan Tarry Elect and China Asset 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 China Asset Management are associated (or correlated) with Dongguan Tarry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongguan Tarry Elect has no effect on the direction of China Asset i.e., China Asset and Dongguan Tarry go up and down completely randomly.
Pair Corralation between China Asset and Dongguan Tarry
Assuming the 90 days trading horizon China Asset is expected to generate 1.38 times less return on investment than Dongguan Tarry. But when comparing it to its historical volatility, China Asset Management is 3.77 times less risky than Dongguan Tarry. It trades about 0.1 of its potential returns per unit of risk. Dongguan Tarry Electronics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,127 in Dongguan Tarry Electronics on October 29, 2024 and sell it today you would earn a total of 1,904 from holding Dongguan Tarry Electronics or generate 37.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Asset Management vs. Dongguan Tarry Electronics
Performance |
| Timeline |
| China Asset Management |
| Dongguan Tarry Elect |
China Asset and Dongguan Tarry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Asset and Dongguan Tarry
The main advantage of trading using opposite China Asset and Dongguan Tarry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Asset position performs unexpectedly, Dongguan Tarry 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 Dongguan Tarry will offset losses from the drop in Dongguan Tarry's long position.| China Asset vs. Dhc Software Co | China Asset vs. Chongqing Changan Automobile | China Asset vs. Linewell Software Co | China Asset vs. Shenzhen Topway Video |
| Dongguan Tarry vs. Dareway Software Co | Dongguan Tarry vs. Guocheng Mining Co | Dongguan Tarry vs. Jiangxi Naipu Mining | Dongguan Tarry vs. GuoChuang Software Co |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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