Correlation Between Dongfeng Automobile and Beijing Mainstreets
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By analyzing existing cross correlation between Dongfeng Automobile Co and Beijing Mainstreets Investment, you can compare the effects of market volatilities on Dongfeng Automobile and Beijing Mainstreets 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 Beijing Mainstreets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Beijing Mainstreets.
Diversification Opportunities for Dongfeng Automobile and Beijing Mainstreets
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongfeng and Beijing is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Beijing Mainstreets Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Mainstreets 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 Beijing Mainstreets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Mainstreets has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and Beijing Mainstreets go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Beijing Mainstreets
Assuming the 90 days trading horizon Dongfeng Automobile is expected to generate 3.9 times less return on investment than Beijing Mainstreets. But when comparing it to its historical volatility, Dongfeng Automobile Co is 1.14 times less risky than Beijing Mainstreets. It trades about 0.04 of its potential returns per unit of risk. Beijing Mainstreets Investment is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 148.00 in Beijing Mainstreets Investment on September 1, 2024 and sell it today you would earn a total of 104.00 from holding Beijing Mainstreets Investment or generate 70.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongfeng Automobile Co vs. Beijing Mainstreets Investment
Performance |
| Timeline |
| Dongfeng Automobile |
| Beijing Mainstreets |
Dongfeng Automobile and Beijing Mainstreets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and Beijing Mainstreets
The main advantage of trading using opposite Dongfeng Automobile and Beijing Mainstreets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, Beijing Mainstreets 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 Beijing Mainstreets will offset losses from the drop in Beijing Mainstreets' long position.| Dongfeng Automobile vs. China Life Insurance | Dongfeng Automobile vs. Cicc Fund Management | Dongfeng Automobile vs. Metro Investment Development | Dongfeng Automobile vs. Zhongrun Resources Investment |
| Beijing Mainstreets vs. BeiGene | Beijing Mainstreets vs. Kweichow Moutai Co | Beijing Mainstreets vs. Beijing Roborock Technology | Beijing Mainstreets vs. G bits Network Technology |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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