Correlation Between Dongfeng Automobile and China Satellite
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By analyzing existing cross correlation between Dongfeng Automobile Co and China Satellite Communications, you can compare the effects of market volatilities on Dongfeng Automobile and China Satellite 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 China Satellite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and China Satellite.
Diversification Opportunities for Dongfeng Automobile and China Satellite
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongfeng and China is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and China Satellite Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Satellite Comm 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 China Satellite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Satellite Comm has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and China Satellite go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and China Satellite
Assuming the 90 days trading horizon Dongfeng Automobile Co is expected to generate 1.16 times more return on investment than China Satellite. However, Dongfeng Automobile is 1.16 times more volatile than China Satellite Communications. It trades about 0.1 of its potential returns per unit of risk. China Satellite Communications is currently generating about -0.04 per unit of risk. If you would invest 725.00 in Dongfeng Automobile Co on September 28, 2024 and sell it today you would earn a total of 48.00 from holding Dongfeng Automobile Co or generate 6.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongfeng Automobile Co vs. China Satellite Communications
Performance |
| Timeline |
| Dongfeng Automobile |
| China Satellite Comm |
Dongfeng Automobile and China Satellite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and China Satellite
The main advantage of trading using opposite Dongfeng Automobile and China Satellite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, China Satellite 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 China Satellite will offset losses from the drop in China Satellite's long position.| Dongfeng Automobile vs. New China Life | Dongfeng Automobile vs. Ming Yang Smart | Dongfeng Automobile vs. 159681 | Dongfeng Automobile vs. 159005 |
| China Satellite vs. Guangzhou Haige Communications | China Satellite vs. Shuhua Sports Co | China Satellite vs. Fibocom Wireless | China Satellite vs. Caihong Display Devices |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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