Correlation Between State Grid and Dongfeng Automobile
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By analyzing existing cross correlation between State Grid InformationCommunication and Dongfeng Automobile Co, you can compare the effects of market volatilities on State Grid and Dongfeng Automobile 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 State Grid with a short position of Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Grid and Dongfeng Automobile.
Diversification Opportunities for State Grid and Dongfeng Automobile
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between State and Dongfeng is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding State Grid InformationCommunic and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile and State Grid 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 State Grid InformationCommunication are associated (or correlated) with Dongfeng Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongfeng Automobile has no effect on the direction of State Grid i.e., State Grid and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between State Grid and Dongfeng Automobile
Assuming the 90 days trading horizon State Grid is expected to generate 1.44 times less return on investment than Dongfeng Automobile. But when comparing it to its historical volatility, State Grid InformationCommunication is 1.1 times less risky than Dongfeng Automobile. It trades about 0.02 of its potential returns per unit of risk. Dongfeng Automobile Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 601.00 in Dongfeng Automobile Co on October 29, 2024 and sell it today you would earn a total of 87.00 from holding Dongfeng Automobile Co or generate 14.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Grid InformationCommunic vs. Dongfeng Automobile Co
Performance |
| Timeline |
| State Grid Informati |
| Dongfeng Automobile |
State Grid and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Grid and Dongfeng Automobile
The main advantage of trading using opposite State Grid and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Grid position performs unexpectedly, Dongfeng Automobile 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 Dongfeng Automobile will offset losses from the drop in Dongfeng Automobile's long position.| State Grid vs. Industrial and Commercial | State Grid vs. Kweichow Moutai Co | State Grid vs. Agricultural Bank of | State Grid vs. China Mobile Limited |
| Dongfeng Automobile vs. Guangzhou Jinyi Media | Dongfeng Automobile vs. Xinxiang Chemical Fiber | Dongfeng Automobile vs. Omnijoi Media Corp | Dongfeng Automobile vs. Liaoning Dingjide Petrochemical |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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