Correlation Between Dongfeng Automobile and Guangdong Electric
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By analyzing existing cross correlation between Dongfeng Automobile Co and Guangdong Electric Power, you can compare the effects of market volatilities on Dongfeng Automobile and Guangdong Electric 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 Guangdong Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Guangdong Electric.
Diversification Opportunities for Dongfeng Automobile and Guangdong Electric
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongfeng and Guangdong is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Guangdong Electric Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Electric Power 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 Guangdong Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Electric Power has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and Guangdong Electric go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Guangdong Electric
Assuming the 90 days trading horizon Dongfeng Automobile Co is expected to under-perform the Guangdong Electric. In addition to that, Dongfeng Automobile is 6.52 times more volatile than Guangdong Electric Power. It trades about -0.22 of its total potential returns per unit of risk. Guangdong Electric Power is currently generating about -0.32 per unit of volatility. If you would invest 206.00 in Guangdong Electric Power on October 17, 2024 and sell it today you would lose (8.00) from holding Guangdong Electric Power or give up 3.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongfeng Automobile Co vs. Guangdong Electric Power
Performance |
| Timeline |
| Dongfeng Automobile |
| Guangdong Electric Power |
Dongfeng Automobile and Guangdong Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and Guangdong Electric
The main advantage of trading using opposite Dongfeng Automobile and Guangdong Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, Guangdong Electric 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 Guangdong Electric will offset losses from the drop in Guangdong Electric'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 |
| Guangdong Electric vs. Quectel Wireless Solutions | Guangdong Electric vs. Iat Automobile Technology | Guangdong Electric vs. Dongfeng Automobile Co | Guangdong Electric vs. Cultural Investment Holdings |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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