Correlation Between Dongfeng Automobile and Industrial Bank
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By analyzing existing cross correlation between Dongfeng Automobile Co and Industrial Bank Co, you can compare the effects of market volatilities on Dongfeng Automobile and Industrial Bank 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 Industrial Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Industrial Bank.
Diversification Opportunities for Dongfeng Automobile and Industrial Bank
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongfeng and Industrial is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Industrial Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Bank 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 Industrial Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Bank has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and Industrial Bank go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Industrial Bank
Assuming the 90 days trading horizon Dongfeng Automobile Co is expected to under-perform the Industrial Bank. In addition to that, Dongfeng Automobile is 3.93 times more volatile than Industrial Bank Co. It trades about -0.28 of its total potential returns per unit of risk. Industrial Bank Co is currently generating about 0.41 per unit of volatility. If you would invest 1,815 in Industrial Bank Co on October 14, 2024 and sell it today you would earn a total of 143.00 from holding Industrial Bank Co or generate 7.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongfeng Automobile Co vs. Industrial Bank Co
Performance |
| Timeline |
| Dongfeng Automobile |
| Industrial Bank |
Dongfeng Automobile and Industrial Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and Industrial Bank
The main advantage of trading using opposite Dongfeng Automobile and Industrial Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, Industrial Bank 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 Industrial Bank will offset losses from the drop in Industrial Bank'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 |
| Industrial Bank vs. Dongfeng Automobile Co | Industrial Bank vs. Haima Automobile Group | Industrial Bank vs. Songz Automobile Air | Industrial Bank vs. Hubei Xingfa Chemicals |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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