Correlation Between Dongfeng Automobile and Chengdu Xinzhu
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By analyzing existing cross correlation between Dongfeng Automobile Co and Chengdu Xinzhu RoadBridge, you can compare the effects of market volatilities on Dongfeng Automobile and Chengdu Xinzhu 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 Chengdu Xinzhu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Chengdu Xinzhu.
Diversification Opportunities for Dongfeng Automobile and Chengdu Xinzhu
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongfeng and Chengdu is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Chengdu Xinzhu RoadBridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Xinzhu RoadBridge 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 Chengdu Xinzhu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Xinzhu RoadBridge has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and Chengdu Xinzhu go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Chengdu Xinzhu
Assuming the 90 days trading horizon Dongfeng Automobile Co is expected to generate 1.27 times more return on investment than Chengdu Xinzhu. However, Dongfeng Automobile is 1.27 times more volatile than Chengdu Xinzhu RoadBridge. It trades about 0.13 of its potential returns per unit of risk. Chengdu Xinzhu RoadBridge is currently generating about 0.05 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. Chengdu Xinzhu RoadBridge
Performance |
| Timeline |
| Dongfeng Automobile |
| Chengdu Xinzhu RoadBridge |
Dongfeng Automobile and Chengdu Xinzhu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and Chengdu Xinzhu
The main advantage of trading using opposite Dongfeng Automobile and Chengdu Xinzhu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, Chengdu Xinzhu 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 Chengdu Xinzhu will offset losses from the drop in Chengdu Xinzhu'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 |
| Chengdu Xinzhu vs. Kweichow Moutai Co | Chengdu Xinzhu vs. NAURA Technology Group | Chengdu Xinzhu vs. Zhejiang Orient Gene | Chengdu Xinzhu vs. APT Medical |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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