Correlation Between Dongfang Electric and Holitech Technology
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By analyzing existing cross correlation between Dongfang Electric Corp and Holitech Technology Co, you can compare the effects of market volatilities on Dongfang Electric and Holitech Technology 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 Holitech Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfang Electric and Holitech Technology.
Diversification Opportunities for Dongfang Electric and Holitech Technology
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dongfang and Holitech is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Dongfang Electric Corp and Holitech Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holitech Technology 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 Holitech Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holitech Technology has no effect on the direction of Dongfang Electric i.e., Dongfang Electric and Holitech Technology go up and down completely randomly.
Pair Corralation between Dongfang Electric and Holitech Technology
Assuming the 90 days trading horizon Dongfang Electric is expected to generate 2.95 times less return on investment than Holitech Technology. But when comparing it to its historical volatility, Dongfang Electric Corp is 1.28 times less risky than Holitech Technology. It trades about 0.14 of its potential returns per unit of risk. Holitech Technology Co is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 129.00 in Holitech Technology Co on September 12, 2024 and sell it today you would earn a total of 103.00 from holding Holitech Technology Co or generate 79.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongfang Electric Corp vs. Holitech Technology Co
Performance |
| Timeline |
| Dongfang Electric Corp |
| Holitech Technology |
Dongfang Electric and Holitech Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfang Electric and Holitech Technology
The main advantage of trading using opposite Dongfang Electric and Holitech Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfang Electric position performs unexpectedly, Holitech Technology 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 Holitech Technology will offset losses from the drop in Holitech Technology's long position.| Dongfang Electric vs. Iat Automobile Technology | Dongfang Electric vs. Heilongjiang Transport Development | Dongfang Electric vs. Shandong Longquan Pipeline | Dongfang Electric vs. Suzhou Douson Drilling |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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