Correlation Between Gansu Jiu and Dongfeng Automobile
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By analyzing existing cross correlation between Gansu Jiu Steel and Dongfeng Automobile Co, you can compare the effects of market volatilities on Gansu Jiu 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 Gansu Jiu with a short position of Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Dongfeng Automobile.
Diversification Opportunities for Gansu Jiu and Dongfeng Automobile
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gansu and Dongfeng is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile and Gansu Jiu 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 Gansu Jiu Steel 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 Gansu Jiu i.e., Gansu Jiu and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Gansu Jiu and Dongfeng Automobile
Assuming the 90 days trading horizon Gansu Jiu is expected to generate 1.51 times less return on investment than Dongfeng Automobile. But when comparing it to its historical volatility, Gansu Jiu Steel is 1.43 times less risky than Dongfeng Automobile. It trades about 0.04 of its potential returns per unit of risk. Dongfeng Automobile Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 604.00 in Dongfeng Automobile Co on September 12, 2024 and sell it today you would earn a total of 175.00 from holding Dongfeng Automobile Co or generate 28.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Dongfeng Automobile Co
Performance |
| Timeline |
| Gansu Jiu Steel |
| Dongfeng Automobile |
Gansu Jiu and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Dongfeng Automobile
The main advantage of trading using opposite Gansu Jiu and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu 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.| Gansu Jiu vs. Zijin Mining Group | Gansu Jiu vs. Wanhua Chemical Group | Gansu Jiu vs. Baoshan Iron Steel | Gansu Jiu vs. Rongsheng Petrochemical Co |
| Dongfeng Automobile vs. Lutian Machinery Co | Dongfeng Automobile vs. PetroChina Co Ltd | Dongfeng Automobile vs. Bank of China | Dongfeng Automobile vs. Gansu Jiu Steel |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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