Correlation Between Dongfeng Automobile and Risen Energy
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By analyzing existing cross correlation between Dongfeng Automobile Co and Risen Energy, you can compare the effects of market volatilities on Dongfeng Automobile and Risen Energy 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 Risen Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Risen Energy.
Diversification Opportunities for Dongfeng Automobile and Risen Energy
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongfeng and Risen is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Risen Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Risen Energy 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 Risen Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Risen Energy has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and Risen Energy go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Risen Energy
Assuming the 90 days trading horizon Dongfeng Automobile Co is expected to generate 0.84 times more return on investment than Risen Energy. However, Dongfeng Automobile Co is 1.19 times less risky than Risen Energy. It trades about 0.03 of its potential returns per unit of risk. Risen Energy is currently generating about -0.02 per unit of risk. If you would invest 583.00 in Dongfeng Automobile Co on August 31, 2024 and sell it today you would earn a total of 147.00 from holding Dongfeng Automobile Co or generate 25.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.74% |
| Values | Daily Returns |
Dongfeng Automobile Co vs. Risen Energy
Performance |
| Timeline |
| Dongfeng Automobile |
| Risen Energy |
Dongfeng Automobile and Risen Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and Risen Energy
The main advantage of trading using opposite Dongfeng Automobile and Risen Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, Risen Energy 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 Risen Energy will offset losses from the drop in Risen Energy'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 |
| Risen Energy vs. Qinghaihuading Industrial Co | Risen Energy vs. Sinomach Automobile Co | Risen Energy vs. Dongfeng Automobile Co | Risen Energy vs. Shenzhen Shenbao Industrial |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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