Correlation Between Anhui Jianghuai and Dongfeng Automobile
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By analyzing existing cross correlation between Anhui Jianghuai Automobile and Dongfeng Automobile Co, you can compare the effects of market volatilities on Anhui Jianghuai 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 Anhui Jianghuai with a short position of Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Jianghuai and Dongfeng Automobile.
Diversification Opportunities for Anhui Jianghuai and Dongfeng Automobile
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Anhui and Dongfeng is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Jianghuai Automobile and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile and Anhui Jianghuai 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 Anhui Jianghuai Automobile 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 Anhui Jianghuai i.e., Anhui Jianghuai and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Anhui Jianghuai and Dongfeng Automobile
Assuming the 90 days trading horizon Anhui Jianghuai Automobile is expected to generate 1.32 times more return on investment than Dongfeng Automobile. However, Anhui Jianghuai is 1.32 times more volatile than Dongfeng Automobile Co. It trades about 0.18 of its potential returns per unit of risk. Dongfeng Automobile Co is currently generating about 0.04 per unit of risk. If you would invest 1,597 in Anhui Jianghuai Automobile on September 1, 2024 and sell it today you would earn a total of 1,914 from holding Anhui Jianghuai Automobile or generate 119.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Jianghuai Automobile vs. Dongfeng Automobile Co
Performance |
| Timeline |
| Anhui Jianghuai Auto |
| Dongfeng Automobile |
Anhui Jianghuai and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Jianghuai and Dongfeng Automobile
The main advantage of trading using opposite Anhui Jianghuai and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Jianghuai 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.| Anhui Jianghuai vs. Sichuan Fulin Transportation | Anhui Jianghuai vs. Emdoor Information Co | Anhui Jianghuai vs. Longmaster Information Tech | Anhui Jianghuai vs. Jiangsu Jinling Sports |
| Dongfeng Automobile vs. China Life Insurance | Dongfeng Automobile vs. Cicc Fund Management | Dongfeng Automobile vs. Metro Investment Development | Dongfeng Automobile vs. Zhongrun Resources Investment |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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