Correlation Between Dongfeng Automobile and Glodon Software
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By analyzing existing cross correlation between Dongfeng Automobile Co and Glodon Software Co, you can compare the effects of market volatilities on Dongfeng Automobile and Glodon Software 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 Glodon Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Glodon Software.
Diversification Opportunities for Dongfeng Automobile and Glodon Software
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongfeng and Glodon is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Glodon Software Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glodon Software 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 Glodon Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glodon Software has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and Glodon Software go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Glodon Software
Assuming the 90 days trading horizon Dongfeng Automobile Co is expected to generate 1.41 times more return on investment than Glodon Software. However, Dongfeng Automobile is 1.41 times more volatile than Glodon Software Co. It trades about 0.13 of its potential returns per unit of risk. Glodon Software Co is currently generating about -0.12 per unit of risk. If you would invest 658.00 in Dongfeng Automobile Co on September 1, 2024 and sell it today you would earn a total of 78.00 from holding Dongfeng Automobile Co or generate 11.85% 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. Glodon Software Co
Performance |
| Timeline |
| Dongfeng Automobile |
| Glodon Software |
Dongfeng Automobile and Glodon Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and Glodon Software
The main advantage of trading using opposite Dongfeng Automobile and Glodon Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, Glodon Software 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 Glodon Software will offset losses from the drop in Glodon Software's 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 |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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