Correlation Between Metro Investment and Dongjiang Environmental
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By analyzing existing cross correlation between Metro Investment Development and Dongjiang Environmental Co, you can compare the effects of market volatilities on Metro Investment and Dongjiang Environmental 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 Metro Investment with a short position of Dongjiang Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Investment and Dongjiang Environmental.
Diversification Opportunities for Metro Investment and Dongjiang Environmental
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Metro and Dongjiang is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Metro Investment Development and Dongjiang Environmental Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongjiang Environmental and Metro Investment 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 Metro Investment Development are associated (or correlated) with Dongjiang Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongjiang Environmental has no effect on the direction of Metro Investment i.e., Metro Investment and Dongjiang Environmental go up and down completely randomly.
Pair Corralation between Metro Investment and Dongjiang Environmental
Assuming the 90 days trading horizon Metro Investment Development is expected to generate 1.28 times more return on investment than Dongjiang Environmental. However, Metro Investment is 1.28 times more volatile than Dongjiang Environmental Co. It trades about 0.09 of its potential returns per unit of risk. Dongjiang Environmental Co is currently generating about 0.01 per unit of risk. If you would invest 436.00 in Metro Investment Development on September 3, 2024 and sell it today you would earn a total of 19.00 from holding Metro Investment Development or generate 4.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro Investment Development vs. Dongjiang Environmental Co
Performance |
| Timeline |
| Metro Investment Dev |
| Dongjiang Environmental |
Metro Investment and Dongjiang Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Investment and Dongjiang Environmental
The main advantage of trading using opposite Metro Investment and Dongjiang Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Investment position performs unexpectedly, Dongjiang Environmental 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 Dongjiang Environmental will offset losses from the drop in Dongjiang Environmental's long position.| Metro Investment vs. Industrial and Commercial | Metro Investment vs. China Construction Bank | Metro Investment vs. Bank of China | Metro Investment vs. Agricultural Bank of |
| Dongjiang Environmental vs. Cultural Investment Holdings | Dongjiang Environmental vs. Gome Telecom Equipment | Dongjiang Environmental vs. Bus Online Co | Dongjiang Environmental vs. Holitech Technology Co |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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