Correlation Between Dongfeng Automobile and Shandong Longquan
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By analyzing existing cross correlation between Dongfeng Automobile Co and Shandong Longquan Pipeline, you can compare the effects of market volatilities on Dongfeng Automobile and Shandong Longquan 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 Shandong Longquan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Shandong Longquan.
Diversification Opportunities for Dongfeng Automobile and Shandong Longquan
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dongfeng and Shandong is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Shandong Longquan Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Longquan 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 Shandong Longquan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Longquan has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and Shandong Longquan go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Shandong Longquan
Assuming the 90 days trading horizon Dongfeng Automobile Co is expected to under-perform the Shandong Longquan. In addition to that, Dongfeng Automobile is 1.83 times more volatile than Shandong Longquan Pipeline. It trades about -0.18 of its total potential returns per unit of risk. Shandong Longquan Pipeline is currently generating about 0.12 per unit of volatility. If you would invest 463.00 in Shandong Longquan Pipeline on October 28, 2024 and sell it today you would earn a total of 17.00 from holding Shandong Longquan Pipeline or generate 3.67% 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. Shandong Longquan Pipeline
Performance |
| Timeline |
| Dongfeng Automobile |
| Shandong Longquan |
Dongfeng Automobile and Shandong Longquan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and Shandong Longquan
The main advantage of trading using opposite Dongfeng Automobile and Shandong Longquan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, Shandong Longquan 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 Shandong Longquan will offset losses from the drop in Shandong Longquan's long position.| Dongfeng Automobile vs. StarPower Semiconductor | Dongfeng Automobile vs. Fujian Longzhou Transportation | Dongfeng Automobile vs. Thinkon Semiconductor Jinzhou | Dongfeng Automobile vs. Will Semiconductor Co |
| Shandong Longquan vs. Quectel Wireless Solutions | Shandong Longquan vs. GuoChuang Software Co | Shandong Longquan vs. Beijing Baolande Software | Shandong Longquan vs. Glodon Software 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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