Correlation Between Dongfeng Automobile and ZTE Corp
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By analyzing existing cross correlation between Dongfeng Automobile Co and ZTE Corp, you can compare the effects of market volatilities on Dongfeng Automobile and ZTE Corp 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 Dongfeng Automobile with a short position of ZTE Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and ZTE Corp.
Diversification Opportunities for Dongfeng Automobile and ZTE Corp
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dongfeng and ZTE is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and ZTE Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZTE Corp and Dongfeng Automobile 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 Dongfeng Automobile Co are associated (or correlated) with ZTE Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZTE Corp has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and ZTE Corp go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and ZTE Corp
Assuming the 90 days trading horizon Dongfeng Automobile is expected to generate 60.76 times less return on investment than ZTE Corp. But when comparing it to its historical volatility, Dongfeng Automobile Co is 1.18 times less risky than ZTE Corp. It trades about 0.0 of its potential returns per unit of risk. ZTE Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3,681 in ZTE Corp on October 25, 2024 and sell it today you would earn a total of 429.00 from holding ZTE Corp or generate 11.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dongfeng Automobile Co vs. ZTE Corp
Performance |
| Timeline |
| Dongfeng Automobile |
| ZTE Corp |
Dongfeng Automobile and ZTE Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and ZTE Corp
The main advantage of trading using opposite Dongfeng Automobile and ZTE Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, ZTE Corp 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 ZTE Corp will offset losses from the drop in ZTE Corp's long position.| Dongfeng Automobile vs. Touchstone International Medical | Dongfeng Automobile vs. Easyhome New Retail | Dongfeng Automobile vs. XinJiang GuoTong Pipeline | Dongfeng Automobile vs. Tinavi Medical Technologies |
| ZTE Corp vs. Uroica Mining Safety | ZTE Corp vs. Eastroc Beverage Group | ZTE Corp vs. Zijin Mining Group | ZTE Corp vs. Pengxin International Mining |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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