Correlation Between Dongfeng Automobile and Masterwork Machinery
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By analyzing existing cross correlation between Dongfeng Automobile Co and Masterwork Machinery, you can compare the effects of market volatilities on Dongfeng Automobile and Masterwork Machinery 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 Masterwork Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Masterwork Machinery.
Diversification Opportunities for Dongfeng Automobile and Masterwork Machinery
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongfeng and Masterwork is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Masterwork Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masterwork Machinery 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 Masterwork Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masterwork Machinery has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and Masterwork Machinery go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Masterwork Machinery
Assuming the 90 days trading horizon Dongfeng Automobile Co is expected to generate 0.95 times more return on investment than Masterwork Machinery. However, Dongfeng Automobile Co is 1.06 times less risky than Masterwork Machinery. It trades about 0.02 of its potential returns per unit of risk. Masterwork Machinery is currently generating about 0.01 per unit of risk. If you would invest 591.00 in Dongfeng Automobile Co on October 14, 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. Masterwork Machinery
Performance |
| Timeline |
| Dongfeng Automobile |
| Masterwork Machinery |
Dongfeng Automobile and Masterwork Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and Masterwork Machinery
The main advantage of trading using opposite Dongfeng Automobile and Masterwork Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, Masterwork Machinery 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 Masterwork Machinery will offset losses from the drop in Masterwork Machinery's long position.| Dongfeng Automobile vs. Jiangsu Yueda Investment | Dongfeng Automobile vs. Hunan Mendale Hometextile | Dongfeng Automobile vs. Zoy Home Furnishing | Dongfeng Automobile vs. Markor International Home |
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 CEOs Directory module to screen CEOs from public companies around the world.
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