Correlation Between Cultural Investment and Dongguan Tarry
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By analyzing existing cross correlation between Cultural Investment Holdings and Dongguan Tarry Electronics, you can compare the effects of market volatilities on Cultural Investment and Dongguan Tarry 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 Cultural Investment with a short position of Dongguan Tarry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cultural Investment and Dongguan Tarry.
Diversification Opportunities for Cultural Investment and Dongguan Tarry
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cultural and Dongguan is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Cultural Investment Holdings and Dongguan Tarry Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongguan Tarry Elect and Cultural 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 Cultural Investment Holdings are associated (or correlated) with Dongguan Tarry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongguan Tarry Elect has no effect on the direction of Cultural Investment i.e., Cultural Investment and Dongguan Tarry go up and down completely randomly.
Pair Corralation between Cultural Investment and Dongguan Tarry
Assuming the 90 days trading horizon Cultural Investment is expected to generate 1.48 times less return on investment than Dongguan Tarry. But when comparing it to its historical volatility, Cultural Investment Holdings is 1.53 times less risky than Dongguan Tarry. It trades about 0.11 of its potential returns per unit of risk. Dongguan Tarry Electronics is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4,660 in Dongguan Tarry Electronics on September 3, 2024 and sell it today you would earn a total of 1,295 from holding Dongguan Tarry Electronics or generate 27.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cultural Investment Holdings vs. Dongguan Tarry Electronics
Performance |
| Timeline |
| Cultural Investment |
| Dongguan Tarry Elect |
Cultural Investment and Dongguan Tarry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cultural Investment and Dongguan Tarry
The main advantage of trading using opposite Cultural Investment and Dongguan Tarry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cultural Investment position performs unexpectedly, Dongguan Tarry 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 Dongguan Tarry will offset losses from the drop in Dongguan Tarry's long position.| Cultural Investment vs. Anji Foodstuff Co | Cultural Investment vs. Shenzhen Clou Electronics | Cultural Investment vs. Muyuan Foodstuff Co | Cultural Investment vs. Leyard Optoelectronic |
| Dongguan Tarry vs. Cultural Investment Holdings | Dongguan Tarry vs. Gome Telecom Equipment | Dongguan Tarry vs. Bus Online Co | Dongguan Tarry 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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