Correlation Between Dongfeng Automobile and New Hope
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By analyzing existing cross correlation between Dongfeng Automobile Co and New Hope Dairy, you can compare the effects of market volatilities on Dongfeng Automobile and New Hope 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 New Hope. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and New Hope.
Diversification Opportunities for Dongfeng Automobile and New Hope
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dongfeng and New is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and New Hope Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Hope Dairy 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 New Hope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Hope Dairy has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and New Hope go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and New Hope
Assuming the 90 days trading horizon Dongfeng Automobile Co is expected to generate 1.11 times more return on investment than New Hope. However, Dongfeng Automobile is 1.11 times more volatile than New Hope Dairy. It trades about 0.04 of its potential returns per unit of risk. New Hope Dairy is currently generating about 0.02 per unit of risk. If you would invest 570.00 in Dongfeng Automobile Co on September 13, 2024 and sell it today you would earn a total of 213.00 from holding Dongfeng Automobile Co or generate 37.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongfeng Automobile Co vs. New Hope Dairy
Performance |
| Timeline |
| Dongfeng Automobile |
| New Hope Dairy |
Dongfeng Automobile and New Hope Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and New Hope
The main advantage of trading using opposite Dongfeng Automobile and New Hope positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, New Hope 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 New Hope will offset losses from the drop in New Hope's long position.| Dongfeng Automobile vs. Guosheng Financial Holding | Dongfeng Automobile vs. Peoples Insurance of | Dongfeng Automobile vs. Zhongrun Resources Investment | Dongfeng Automobile vs. Shenwu Energy Saving |
| New Hope vs. Metallurgical of | New Hope vs. Hefei Metalforming Mach | New Hope vs. Jiangsu Xinri E Vehicle | New Hope vs. Dongfeng Automobile 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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