Correlation Between Dongfeng Automobile and Piotech
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By analyzing existing cross correlation between Dongfeng Automobile Co and Piotech Inc A, you can compare the effects of market volatilities on Dongfeng Automobile and Piotech 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 Piotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Piotech.
Diversification Opportunities for Dongfeng Automobile and Piotech
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongfeng and Piotech is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Piotech Inc A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piotech Inc A 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 Piotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piotech Inc A has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and Piotech go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Piotech
Assuming the 90 days trading horizon Dongfeng Automobile Co is expected to generate 0.76 times more return on investment than Piotech. However, Dongfeng Automobile Co is 1.32 times less risky than Piotech. It trades about 0.04 of its potential returns per unit of risk. Piotech Inc A is currently generating about 0.0 per unit of risk. If you would invest 573.00 in Dongfeng Automobile Co on August 30, 2024 and sell it today you would earn a total of 152.00 from holding Dongfeng Automobile Co or generate 26.53% 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. Piotech Inc A
Performance |
| Timeline |
| Dongfeng Automobile |
| Piotech Inc A |
Dongfeng Automobile and Piotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and Piotech
The main advantage of trading using opposite Dongfeng Automobile and Piotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, Piotech 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 Piotech will offset losses from the drop in Piotech's long position.| Dongfeng Automobile vs. Zhengzhou Qianweiyangchu Food | Dongfeng Automobile vs. Impulse Qingdao Health | Dongfeng Automobile vs. Yankershop Food Co | Dongfeng Automobile vs. Healthcare Co |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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