Correlation Between Dongfeng Automobile and Zhejiang Qianjiang
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By analyzing existing cross correlation between Dongfeng Automobile Co and Zhejiang Qianjiang Motorcycle, you can compare the effects of market volatilities on Dongfeng Automobile and Zhejiang Qianjiang 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 Zhejiang Qianjiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Zhejiang Qianjiang.
Diversification Opportunities for Dongfeng Automobile and Zhejiang Qianjiang
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dongfeng and Zhejiang is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Zhejiang Qianjiang Motorcycle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Qianjiang 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 Zhejiang Qianjiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Qianjiang has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and Zhejiang Qianjiang go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Zhejiang Qianjiang
Assuming the 90 days trading horizon Dongfeng Automobile Co is expected to generate 1.93 times more return on investment than Zhejiang Qianjiang. However, Dongfeng Automobile is 1.93 times more volatile than Zhejiang Qianjiang Motorcycle. It trades about 0.11 of its potential returns per unit of risk. Zhejiang Qianjiang Motorcycle is currently generating about -0.07 per unit of risk. If you would invest 663.00 in Dongfeng Automobile Co on August 30, 2024 and sell it today you would earn a total of 62.00 from holding Dongfeng Automobile Co or generate 9.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongfeng Automobile Co vs. Zhejiang Qianjiang Motorcycle
Performance |
| Timeline |
| Dongfeng Automobile |
| Zhejiang Qianjiang |
Dongfeng Automobile and Zhejiang Qianjiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and Zhejiang Qianjiang
The main advantage of trading using opposite Dongfeng Automobile and Zhejiang Qianjiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, Zhejiang Qianjiang 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 Zhejiang Qianjiang will offset losses from the drop in Zhejiang Qianjiang's long position.| Dongfeng Automobile vs. Ming Yang Smart | Dongfeng Automobile vs. 159681 | Dongfeng Automobile vs. 159005 | Dongfeng Automobile vs. 516220 |
| Zhejiang Qianjiang vs. Glodon Software Co | Zhejiang Qianjiang vs. Jiangyin Jianghua Microelectronics | Zhejiang Qianjiang vs. Success Electronics | Zhejiang Qianjiang vs. Servyou Software Group |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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