Correlation Between Dongfeng Automobile and Yingde Greatchem
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By analyzing existing cross correlation between Dongfeng Automobile Co and Yingde Greatchem Chemicals, you can compare the effects of market volatilities on Dongfeng Automobile and Yingde Greatchem 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 Yingde Greatchem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Yingde Greatchem.
Diversification Opportunities for Dongfeng Automobile and Yingde Greatchem
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongfeng and Yingde is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Yingde Greatchem Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yingde Greatchem Che 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 Yingde Greatchem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yingde Greatchem Che has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and Yingde Greatchem go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Yingde Greatchem
Assuming the 90 days trading horizon Dongfeng Automobile Co is expected to generate 2.08 times more return on investment than Yingde Greatchem. However, Dongfeng Automobile is 2.08 times more volatile than Yingde Greatchem Chemicals. It trades about 0.18 of its potential returns per unit of risk. Yingde Greatchem Chemicals is currently generating about 0.09 per unit of risk. If you would invest 629.00 in Dongfeng Automobile Co on September 2, 2024 and sell it today you would earn a total of 107.00 from holding Dongfeng Automobile Co or generate 17.01% 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. Yingde Greatchem Chemicals
Performance |
| Timeline |
| Dongfeng Automobile |
| Yingde Greatchem Che |
Dongfeng Automobile and Yingde Greatchem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and Yingde Greatchem
The main advantage of trading using opposite Dongfeng Automobile and Yingde Greatchem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, Yingde Greatchem 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 Yingde Greatchem will offset losses from the drop in Yingde Greatchem's long position.| Dongfeng Automobile vs. Biwin Storage Technology | Dongfeng Automobile vs. PetroChina Co Ltd | Dongfeng Automobile vs. Industrial and Commercial | Dongfeng Automobile vs. China Construction Bank |
| Yingde Greatchem vs. Zijin Mining Group | Yingde Greatchem vs. Wanhua Chemical Group | Yingde Greatchem vs. Baoshan Iron Steel | Yingde Greatchem vs. Shandong Gold Mining |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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