Correlation Between Dongfeng Automobile and Beijing HuaYuanYiTong
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By analyzing existing cross correlation between Dongfeng Automobile Co and Beijing HuaYuanYiTong Thermal, you can compare the effects of market volatilities on Dongfeng Automobile and Beijing HuaYuanYiTong 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 Beijing HuaYuanYiTong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Beijing HuaYuanYiTong.
Diversification Opportunities for Dongfeng Automobile and Beijing HuaYuanYiTong
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dongfeng and Beijing is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Beijing HuaYuanYiTong Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing HuaYuanYiTong 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 Beijing HuaYuanYiTong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing HuaYuanYiTong has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and Beijing HuaYuanYiTong go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Beijing HuaYuanYiTong
Assuming the 90 days trading horizon Dongfeng Automobile Co is expected to generate 0.91 times more return on investment than Beijing HuaYuanYiTong. However, Dongfeng Automobile Co is 1.1 times less risky than Beijing HuaYuanYiTong. It trades about 0.02 of its potential returns per unit of risk. Beijing HuaYuanYiTong Thermal is currently generating about 0.02 per unit of risk. If you would invest 601.00 in Dongfeng Automobile Co on October 29, 2024 and sell it today you would earn a total of 87.00 from holding Dongfeng Automobile Co or generate 14.48% 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. Beijing HuaYuanYiTong Thermal
Performance |
| Timeline |
| Dongfeng Automobile |
| Beijing HuaYuanYiTong |
Dongfeng Automobile and Beijing HuaYuanYiTong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and Beijing HuaYuanYiTong
The main advantage of trading using opposite Dongfeng Automobile and Beijing HuaYuanYiTong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, Beijing HuaYuanYiTong 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 Beijing HuaYuanYiTong will offset losses from the drop in Beijing HuaYuanYiTong's long position.| Dongfeng Automobile vs. Guangzhou Jinyi Media | Dongfeng Automobile vs. Xinxiang Chemical Fiber | Dongfeng Automobile vs. Omnijoi Media Corp | Dongfeng Automobile vs. Liaoning Dingjide Petrochemical |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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