Correlation Between Dongfeng Automobile and Zoy Home
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By analyzing existing cross correlation between Dongfeng Automobile Co and Zoy Home Furnishing, you can compare the effects of market volatilities on Dongfeng Automobile and Zoy Home 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 Zoy Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Zoy Home.
Diversification Opportunities for Dongfeng Automobile and Zoy Home
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongfeng and Zoy is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Zoy Home Furnishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoy Home Furnishing 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 Zoy Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoy Home Furnishing has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and Zoy Home go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Zoy Home
Assuming the 90 days trading horizon Dongfeng Automobile Co is expected to generate 1.84 times more return on investment than Zoy Home. However, Dongfeng Automobile is 1.84 times more volatile than Zoy Home Furnishing. It trades about 0.13 of its potential returns per unit of risk. Zoy Home Furnishing is currently generating about 0.19 per unit of risk. If you would invest 658.00 in Dongfeng Automobile Co on September 1, 2024 and sell it today you would earn a total of 78.00 from holding Dongfeng Automobile Co or generate 11.85% 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. Zoy Home Furnishing
Performance |
| Timeline |
| Dongfeng Automobile |
| Zoy Home Furnishing |
Dongfeng Automobile and Zoy Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and Zoy Home
The main advantage of trading using opposite Dongfeng Automobile and Zoy Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, Zoy Home 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 Zoy Home will offset losses from the drop in Zoy Home'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 |
| Zoy Home vs. Xinhua Winshare Publishing | Zoy Home vs. Dhc Software Co | Zoy Home vs. Yingde Greatchem Chemicals | Zoy Home vs. Shanghai Action Education |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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