Correlation Between Dongfeng Automobile and Sublime China
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By analyzing existing cross correlation between Dongfeng Automobile Co and Sublime China Information, you can compare the effects of market volatilities on Dongfeng Automobile and Sublime China 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 Sublime China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Sublime China.
Diversification Opportunities for Dongfeng Automobile and Sublime China
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dongfeng and Sublime is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Sublime China Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sublime China Information 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 Sublime China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sublime China Information has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and Sublime China go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Sublime China
Assuming the 90 days trading horizon Dongfeng Automobile is expected to generate 7.83 times less return on investment than Sublime China. But when comparing it to its historical volatility, Dongfeng Automobile Co is 1.43 times less risky than Sublime China. It trades about 0.02 of its potential returns per unit of risk. Sublime China Information is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,122 in Sublime China Information on October 18, 2024 and sell it today you would earn a total of 2,068 from holding Sublime China Information or generate 50.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongfeng Automobile Co vs. Sublime China Information
Performance |
| Timeline |
| Dongfeng Automobile |
| Sublime China Information |
Dongfeng Automobile and Sublime China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and Sublime China
The main advantage of trading using opposite Dongfeng Automobile and Sublime China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, Sublime China 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 Sublime China will offset losses from the drop in Sublime China's long position.| Dongfeng Automobile vs. Changjiang Jinggong Steel | Dongfeng Automobile vs. Industrial Bank Co | Dongfeng Automobile vs. Xiamen Bank Co | Dongfeng Automobile vs. Baoshan Iron Steel |
| Sublime China vs. Guangzhou Automobile Group | Sublime China vs. Dongfeng Automobile Co | Sublime China vs. Sinomach Automobile Co | Sublime China vs. CIMC Vehicles Co |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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