Correlation Between Dongfeng Automobile and Hunan Mendale
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By analyzing existing cross correlation between Dongfeng Automobile Co and Hunan Mendale Hometextile, you can compare the effects of market volatilities on Dongfeng Automobile and Hunan Mendale 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 Mendale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Hunan Mendale.
Diversification Opportunities for Dongfeng Automobile and Hunan Mendale
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dongfeng and Hunan is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Hunan Mendale Hometextile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Mendale Hometextile 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 Mendale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Mendale Hometextile has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and Hunan Mendale go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Hunan Mendale
Assuming the 90 days trading horizon Dongfeng Automobile is expected to generate 9.03 times less return on investment than Hunan Mendale. But when comparing it to its historical volatility, Dongfeng Automobile Co is 1.18 times less risky than Hunan Mendale. It trades about 0.02 of its potential returns per unit of risk. Hunan Mendale Hometextile is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 183.00 in Hunan Mendale Hometextile on October 18, 2024 and sell it today you would earn a total of 128.00 from holding Hunan Mendale Hometextile or generate 69.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongfeng Automobile Co vs. Hunan Mendale Hometextile
Performance |
| Timeline |
| Dongfeng Automobile |
| Hunan Mendale Hometextile |
Dongfeng Automobile and Hunan Mendale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and Hunan Mendale
The main advantage of trading using opposite Dongfeng Automobile and Hunan Mendale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, Hunan Mendale 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 Mendale will offset losses from the drop in Hunan Mendale's long position.| Dongfeng Automobile vs. Changjiang Jinggong Steel | Dongfeng Automobile vs. Industrial Bank Co | Dongfeng Automobile vs. Xiamen Bank Co | Dongfeng Automobile vs. Baoshan Iron Steel |
| Hunan Mendale vs. China Mobile Limited | Hunan Mendale vs. Songz Automobile Air | Hunan Mendale vs. State Grid InformationCommunication | Hunan Mendale vs. Dongfeng Automobile 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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