Correlation Between Dongfeng Automobile and Ningbo MedicalSystem
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By analyzing existing cross correlation between Dongfeng Automobile Co and Ningbo MedicalSystem Biotechnology, you can compare the effects of market volatilities on Dongfeng Automobile and Ningbo MedicalSystem 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 Ningbo MedicalSystem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Ningbo MedicalSystem.
Diversification Opportunities for Dongfeng Automobile and Ningbo MedicalSystem
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dongfeng and Ningbo is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Ningbo MedicalSystem Biotechno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo MedicalSystem 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 Ningbo MedicalSystem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo MedicalSystem has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and Ningbo MedicalSystem go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Ningbo MedicalSystem
Assuming the 90 days trading horizon Dongfeng Automobile Co is expected to generate 2.1 times more return on investment than Ningbo MedicalSystem. However, Dongfeng Automobile is 2.1 times more volatile than Ningbo MedicalSystem Biotechnology. It trades about -0.14 of its potential returns per unit of risk. Ningbo MedicalSystem Biotechnology is currently generating about -0.41 per unit of risk. If you would invest 779.00 in Dongfeng Automobile Co on October 11, 2024 and sell it today you would lose (91.00) from holding Dongfeng Automobile Co or give up 11.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongfeng Automobile Co vs. Ningbo MedicalSystem Biotechno
Performance |
| Timeline |
| Dongfeng Automobile |
| Ningbo MedicalSystem |
Dongfeng Automobile and Ningbo MedicalSystem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and Ningbo MedicalSystem
The main advantage of trading using opposite Dongfeng Automobile and Ningbo MedicalSystem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, Ningbo MedicalSystem 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 Ningbo MedicalSystem will offset losses from the drop in Ningbo MedicalSystem's long position.| Dongfeng Automobile vs. Guilin Seamild Foods | Dongfeng Automobile vs. Xiangpiaopiao Food Co | Dongfeng Automobile vs. Hainan Haiqi Transportation | Dongfeng Automobile vs. Chengdu Xinzhu RoadBridge |
| Ningbo MedicalSystem vs. Beijing Kingsoft Office | Ningbo MedicalSystem vs. Bank of Communications | Ningbo MedicalSystem vs. King Strong New Material | Ningbo MedicalSystem vs. Quectel Wireless Solutions |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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