Correlation Between Dongfeng Automobile and Sichuan Jinshi
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By analyzing existing cross correlation between Dongfeng Automobile Co and Sichuan Jinshi Technology, you can compare the effects of market volatilities on Dongfeng Automobile and Sichuan Jinshi 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 Sichuan Jinshi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Sichuan Jinshi.
Diversification Opportunities for Dongfeng Automobile and Sichuan Jinshi
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongfeng and Sichuan is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Sichuan Jinshi Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Jinshi Technology 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 Sichuan Jinshi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Jinshi Technology has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and Sichuan Jinshi go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Sichuan Jinshi
Assuming the 90 days trading horizon Dongfeng Automobile Co is expected to generate 1.09 times more return on investment than Sichuan Jinshi. However, Dongfeng Automobile is 1.09 times more volatile than Sichuan Jinshi Technology. It trades about 0.02 of its potential returns per unit of risk. Sichuan Jinshi Technology is currently generating about -0.01 per unit of risk. If you would invest 591.00 in Dongfeng Automobile Co on October 13, 2024 and sell it today you would earn a total of 66.00 from holding Dongfeng Automobile Co or generate 11.17% 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. Sichuan Jinshi Technology
Performance |
| Timeline |
| Dongfeng Automobile |
| Sichuan Jinshi Technology |
Dongfeng Automobile and Sichuan Jinshi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and Sichuan Jinshi
The main advantage of trading using opposite Dongfeng Automobile and Sichuan Jinshi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, Sichuan Jinshi 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 Sichuan Jinshi will offset losses from the drop in Sichuan Jinshi's long position.| Dongfeng Automobile vs. Zhongzhu Medical Holdings | Dongfeng Automobile vs. Huizhou Speed Wireless | Dongfeng Automobile vs. Tinavi Medical Technologies | Dongfeng Automobile vs. Xiangyu Medical Co |
| Sichuan Jinshi vs. Dongfeng Automobile Co | Sichuan Jinshi vs. Ningbo Jintian Copper | Sichuan Jinshi vs. Offshore Oil Engineering | Sichuan Jinshi vs. Huizhou Speed Wireless |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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