Correlation Between Dongfeng Automobile and AVCON Information
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By analyzing existing cross correlation between Dongfeng Automobile Co and AVCON Information Tech, you can compare the effects of market volatilities on Dongfeng Automobile and AVCON Information 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 AVCON Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and AVCON Information.
Diversification Opportunities for Dongfeng Automobile and AVCON Information
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongfeng and AVCON is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and AVCON Information Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVCON Information 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 AVCON Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVCON Information Tech has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and AVCON Information go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and AVCON Information
Assuming the 90 days trading horizon Dongfeng Automobile is expected to generate 2.45 times less return on investment than AVCON Information. But when comparing it to its historical volatility, Dongfeng Automobile Co is 1.17 times less risky than AVCON Information. It trades about 0.04 of its potential returns per unit of risk. AVCON Information Tech is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 357.00 in AVCON Information Tech on August 31, 2024 and sell it today you would earn a total of 126.00 from holding AVCON Information Tech or generate 35.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongfeng Automobile Co vs. AVCON Information Tech
Performance |
| Timeline |
| Dongfeng Automobile |
| AVCON Information Tech |
Dongfeng Automobile and AVCON Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and AVCON Information
The main advantage of trading using opposite Dongfeng Automobile and AVCON Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, AVCON Information 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 AVCON Information will offset losses from the drop in AVCON Information's long position.| Dongfeng Automobile vs. By health | Dongfeng Automobile vs. Zhejiang Construction Investment | Dongfeng Automobile vs. De Rucci Healthy | Dongfeng Automobile vs. Chengdu Xingrong Investment |
| AVCON Information vs. Kweichow Moutai Co | AVCON Information vs. NAURA Technology Group | AVCON Information vs. APT Medical | AVCON Information vs. Contemporary Amperex Technology |
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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