Correlation Between Dongfang Electric and China Nonferrous
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By analyzing existing cross correlation between Dongfang Electric Corp and China Nonferrous Metal, you can compare the effects of market volatilities on Dongfang Electric and China Nonferrous 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 Dongfang Electric with a short position of China Nonferrous. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfang Electric and China Nonferrous.
Diversification Opportunities for Dongfang Electric and China Nonferrous
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dongfang and China is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Dongfang Electric Corp and China Nonferrous Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Nonferrous Metal and Dongfang Electric 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 Dongfang Electric Corp are associated (or correlated) with China Nonferrous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Nonferrous Metal has no effect on the direction of Dongfang Electric i.e., Dongfang Electric and China Nonferrous go up and down completely randomly.
Pair Corralation between Dongfang Electric and China Nonferrous
Assuming the 90 days trading horizon Dongfang Electric Corp is expected to under-perform the China Nonferrous. In addition to that, Dongfang Electric is 1.38 times more volatile than China Nonferrous Metal. It trades about -0.14 of its total potential returns per unit of risk. China Nonferrous Metal is currently generating about -0.16 per unit of volatility. If you would invest 553.00 in China Nonferrous Metal on September 12, 2024 and sell it today you would lose (26.00) from holding China Nonferrous Metal or give up 4.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongfang Electric Corp vs. China Nonferrous Metal
Performance |
| Timeline |
| Dongfang Electric Corp |
| China Nonferrous Metal |
Dongfang Electric and China Nonferrous Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfang Electric and China Nonferrous
The main advantage of trading using opposite Dongfang Electric and China Nonferrous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfang Electric position performs unexpectedly, China Nonferrous 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 China Nonferrous will offset losses from the drop in China Nonferrous' long position.| Dongfang Electric vs. China Nonferrous Metal | Dongfang Electric vs. Guocheng Mining Co | Dongfang Electric vs. Metallurgical of | Dongfang Electric vs. Pengxin International Mining |
| China Nonferrous vs. Zijin Mining Group | China Nonferrous vs. Wanhua Chemical Group | China Nonferrous vs. Baoshan Iron Steel | China Nonferrous vs. Rongsheng Petrochemical 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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