Correlation Between Dalian Thermal and Muyuan Foodstuff
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By analyzing existing cross correlation between Dalian Thermal Power and Muyuan Foodstuff Co, you can compare the effects of market volatilities on Dalian Thermal and Muyuan Foodstuff 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 Dalian Thermal with a short position of Muyuan Foodstuff. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalian Thermal and Muyuan Foodstuff.
Diversification Opportunities for Dalian Thermal and Muyuan Foodstuff
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dalian and Muyuan is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Dalian Thermal Power and Muyuan Foodstuff Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muyuan Foodstuff and Dalian Thermal 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 Dalian Thermal Power are associated (or correlated) with Muyuan Foodstuff. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muyuan Foodstuff has no effect on the direction of Dalian Thermal i.e., Dalian Thermal and Muyuan Foodstuff go up and down completely randomly.
Pair Corralation between Dalian Thermal and Muyuan Foodstuff
Assuming the 90 days trading horizon Dalian Thermal Power is expected to generate 2.14 times more return on investment than Muyuan Foodstuff. However, Dalian Thermal is 2.14 times more volatile than Muyuan Foodstuff Co. It trades about 0.03 of its potential returns per unit of risk. Muyuan Foodstuff Co is currently generating about -0.02 per unit of risk. If you would invest 557.00 in Dalian Thermal Power on October 16, 2024 and sell it today you would earn a total of 64.00 from holding Dalian Thermal Power or generate 11.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dalian Thermal Power vs. Muyuan Foodstuff Co
Performance |
| Timeline |
| Dalian Thermal Power |
| Muyuan Foodstuff |
Dalian Thermal and Muyuan Foodstuff Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dalian Thermal and Muyuan Foodstuff
The main advantage of trading using opposite Dalian Thermal and Muyuan Foodstuff positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalian Thermal position performs unexpectedly, Muyuan Foodstuff 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 Muyuan Foodstuff will offset losses from the drop in Muyuan Foodstuff's long position.| Dalian Thermal vs. Chengdu Xingrong Investment | Dalian Thermal vs. Hubei Geoway Investment | Dalian Thermal vs. Rising Nonferrous Metals | Dalian Thermal vs. Hunan Investment Group |
| Muyuan Foodstuff vs. Shanghai Phichem Material | Muyuan Foodstuff vs. Guangzhou Restaurants Group | Muyuan Foodstuff vs. Dazhong Transportation Group | Muyuan Foodstuff vs. Hangzhou Arcvideo Technology |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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