Correlation Between Dongfeng Automobile and Hunan Investment
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By analyzing existing cross correlation between Dongfeng Automobile Co and Hunan Investment Group, you can compare the effects of market volatilities on Dongfeng Automobile and Hunan Investment 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 Hunan Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Hunan Investment.
Diversification Opportunities for Dongfeng Automobile and Hunan Investment
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongfeng and Hunan is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Hunan Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Investment 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 Hunan Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Investment has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and Hunan Investment go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Hunan Investment
Assuming the 90 days trading horizon Dongfeng Automobile Co is expected to generate 1.24 times more return on investment than Hunan Investment. However, Dongfeng Automobile is 1.24 times more volatile than Hunan Investment Group. It trades about 0.02 of its potential returns per unit of risk. Hunan Investment Group is currently generating about 0.01 per unit of risk. If you would invest 598.00 in Dongfeng Automobile Co on October 25, 2024 and sell it today you would earn a total of 94.00 from holding Dongfeng Automobile Co or generate 15.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongfeng Automobile Co vs. Hunan Investment Group
Performance |
| Timeline |
| Dongfeng Automobile |
| Hunan Investment |
Dongfeng Automobile and Hunan Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and Hunan Investment
The main advantage of trading using opposite Dongfeng Automobile and Hunan Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, Hunan Investment 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 Hunan Investment will offset losses from the drop in Hunan Investment's long position.| Dongfeng Automobile vs. China Longyuan Power | Dongfeng Automobile vs. PetroChina Co Ltd | Dongfeng Automobile vs. Guangxi Guiguan Electric | Dongfeng Automobile vs. Yantai North Andre |
| Hunan Investment vs. Agricultural Bank of | Hunan Investment vs. Industrial and Commercial | Hunan Investment vs. Bank of China | Hunan Investment vs. China Construction Bank |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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