Correlation Between Dongfeng Automobile and Runjian Communication
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By analyzing existing cross correlation between Dongfeng Automobile Co and Runjian Communication Co, you can compare the effects of market volatilities on Dongfeng Automobile and Runjian Communication 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 Runjian Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Runjian Communication.
Diversification Opportunities for Dongfeng Automobile and Runjian Communication
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dongfeng and Runjian is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Runjian Communication Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Runjian Communication 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 Runjian Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Runjian Communication has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and Runjian Communication go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Runjian Communication
Assuming the 90 days trading horizon Dongfeng Automobile Co is expected to under-perform the Runjian Communication. But the stock apears to be less risky and, when comparing its historical volatility, Dongfeng Automobile Co is 1.04 times less risky than Runjian Communication. The stock trades about -0.18 of its potential returns per unit of risk. The Runjian Communication Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,041 in Runjian Communication Co on October 18, 2024 and sell it today you would earn a total of 14.00 from holding Runjian Communication Co or generate 0.46% 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. Runjian Communication Co
Performance |
| Timeline |
| Dongfeng Automobile |
| Runjian Communication |
Dongfeng Automobile and Runjian Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and Runjian Communication
The main advantage of trading using opposite Dongfeng Automobile and Runjian Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, Runjian Communication 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 Runjian Communication will offset losses from the drop in Runjian Communication's long position.| Dongfeng Automobile vs. Beijing Mainstreets Investment | Dongfeng Automobile vs. ButOne Information Corp | Dongfeng Automobile vs. Sublime China Information | Dongfeng Automobile vs. Shenzhen SDG Information |
| Runjian Communication vs. Ningbo Jintian Copper | Runjian Communication vs. Ye Chiu Metal | Runjian Communication vs. Dongfeng Automobile Co | Runjian Communication vs. Xinjiang Baodi Mining |
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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