Correlation Between Dongfeng Automobile and Great Sun
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By analyzing existing cross correlation between Dongfeng Automobile Co and Great Sun Foods Co, you can compare the effects of market volatilities on Dongfeng Automobile and Great Sun 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 Great Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Great Sun.
Diversification Opportunities for Dongfeng Automobile and Great Sun
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongfeng and Great is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Great Sun Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Sun Foods 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 Great Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Sun Foods has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and Great Sun go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Great Sun
Assuming the 90 days trading horizon Dongfeng Automobile Co is expected to generate 0.82 times more return on investment than Great Sun. However, Dongfeng Automobile Co is 1.22 times less risky than Great Sun. It trades about 0.02 of its potential returns per unit of risk. Great Sun Foods Co is currently generating about 0.01 per unit of risk. If you would invest 620.00 in Dongfeng Automobile Co on August 27, 2024 and sell it today you would earn a total of 80.00 from holding Dongfeng Automobile Co or generate 12.9% 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. Great Sun Foods Co
Performance |
| Timeline |
| Dongfeng Automobile |
| Great Sun Foods |
Dongfeng Automobile and Great Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and Great Sun
The main advantage of trading using opposite Dongfeng Automobile and Great Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, Great Sun 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 Great Sun will offset losses from the drop in Great Sun's long position.| Dongfeng Automobile vs. Lutian Machinery Co | Dongfeng Automobile vs. China Longyuan Power | Dongfeng Automobile vs. Changshu Tongrun Auto | Dongfeng Automobile vs. PetroChina Co Ltd |
| Great Sun vs. China Petroleum Chemical | Great Sun vs. PetroChina Co Ltd | Great Sun vs. China State Construction | Great Sun vs. China Railway Group |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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