Correlation Between Dongfeng Automobile and StarPower Semiconductor
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By analyzing existing cross correlation between Dongfeng Automobile Co and StarPower Semiconductor, you can compare the effects of market volatilities on Dongfeng Automobile and StarPower Semiconductor 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 StarPower Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and StarPower Semiconductor.
Diversification Opportunities for Dongfeng Automobile and StarPower Semiconductor
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongfeng and StarPower is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and StarPower Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StarPower Semiconductor 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 StarPower Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StarPower Semiconductor has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and StarPower Semiconductor go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and StarPower Semiconductor
Assuming the 90 days trading horizon Dongfeng Automobile Co is expected to generate 0.9 times more return on investment than StarPower Semiconductor. However, Dongfeng Automobile Co is 1.11 times less risky than StarPower Semiconductor. It trades about 0.04 of its potential returns per unit of risk. StarPower Semiconductor is currently generating about -0.06 per unit of risk. If you would invest 579.00 in Dongfeng Automobile Co on September 14, 2024 and sell it today you would earn a total of 237.00 from holding Dongfeng Automobile Co or generate 40.93% 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. StarPower Semiconductor
Performance |
| Timeline |
| Dongfeng Automobile |
| StarPower Semiconductor |
Dongfeng Automobile and StarPower Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and StarPower Semiconductor
The main advantage of trading using opposite Dongfeng Automobile and StarPower Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, StarPower Semiconductor 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 StarPower Semiconductor will offset losses from the drop in StarPower Semiconductor's long position.| Dongfeng Automobile vs. Cambricon Technologies Corp | Dongfeng Automobile vs. Loongson Technology Corp | Dongfeng Automobile vs. Shenzhen Fortune Trend | Dongfeng Automobile vs. Chongqing Road Bridge |
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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