Correlation Between Dongfeng Automobile and Lepu Medical
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By analyzing existing cross correlation between Dongfeng Automobile Co and Lepu Medical Tech, you can compare the effects of market volatilities on Dongfeng Automobile and Lepu Medical 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 Lepu Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Lepu Medical.
Diversification Opportunities for Dongfeng Automobile and Lepu Medical
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dongfeng and Lepu is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Lepu Medical Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lepu Medical Tech 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 Lepu Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lepu Medical Tech has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and Lepu Medical go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Lepu Medical
Assuming the 90 days trading horizon Dongfeng Automobile Co is expected to under-perform the Lepu Medical. In addition to that, Dongfeng Automobile is 2.18 times more volatile than Lepu Medical Tech. It trades about -0.18 of its total potential returns per unit of risk. Lepu Medical Tech is currently generating about -0.27 per unit of volatility. If you would invest 1,189 in Lepu Medical Tech on October 18, 2024 and sell it today you would lose (113.00) from holding Lepu Medical Tech or give up 9.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongfeng Automobile Co vs. Lepu Medical Tech
Performance |
| Timeline |
| Dongfeng Automobile |
| Lepu Medical Tech |
Dongfeng Automobile and Lepu Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and Lepu Medical
The main advantage of trading using opposite Dongfeng Automobile and Lepu Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, Lepu Medical 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 Lepu Medical will offset losses from the drop in Lepu Medical'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 |
| Lepu Medical vs. Wuhan Yangtze Communication | Lepu Medical vs. Dosilicon Co | Lepu Medical vs. Jinsanjiang Silicon Material | Lepu Medical vs. Zhejiang JIULI Hi tech |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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