Correlation Between Dongfeng Automobile and Anhui Jianghuai
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By analyzing existing cross correlation between Dongfeng Automobile Co and Anhui Jianghuai Automobile, you can compare the effects of market volatilities on Dongfeng Automobile and Anhui Jianghuai 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 Anhui Jianghuai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Anhui Jianghuai.
Diversification Opportunities for Dongfeng Automobile and Anhui Jianghuai
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongfeng and Anhui is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Anhui Jianghuai Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Jianghuai Auto 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 Anhui Jianghuai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Jianghuai Auto has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and Anhui Jianghuai go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Anhui Jianghuai
Assuming the 90 days trading horizon Dongfeng Automobile is expected to generate 5.7 times less return on investment than Anhui Jianghuai. But when comparing it to its historical volatility, Dongfeng Automobile Co is 1.32 times less risky than Anhui Jianghuai. It trades about 0.04 of its potential returns per unit of risk. Anhui Jianghuai Automobile is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,597 in Anhui Jianghuai Automobile on September 1, 2024 and sell it today you would earn a total of 1,914 from holding Anhui Jianghuai Automobile or generate 119.85% 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. Anhui Jianghuai Automobile
Performance |
| Timeline |
| Dongfeng Automobile |
| Anhui Jianghuai Auto |
Dongfeng Automobile and Anhui Jianghuai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and Anhui Jianghuai
The main advantage of trading using opposite Dongfeng Automobile and Anhui Jianghuai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, Anhui Jianghuai 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 Anhui Jianghuai will offset losses from the drop in Anhui Jianghuai's long position.| Dongfeng Automobile vs. China Life Insurance | Dongfeng Automobile vs. Cicc Fund Management | Dongfeng Automobile vs. Metro Investment Development | Dongfeng Automobile vs. Zhongrun Resources Investment |
| Anhui Jianghuai vs. Sichuan Fulin Transportation | Anhui Jianghuai vs. Emdoor Information Co | Anhui Jianghuai vs. Longmaster Information Tech | Anhui Jianghuai vs. Jiangsu Jinling Sports |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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