Correlation Between New China and Dongrui Food
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By analyzing existing cross correlation between New China Life and Dongrui Food Group, you can compare the effects of market volatilities on New China and Dongrui Food 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 New China with a short position of Dongrui Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of New China and Dongrui Food.
Diversification Opportunities for New China and Dongrui Food
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between New and Dongrui is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding New China Life and Dongrui Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongrui Food Group and New China 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 New China Life are associated (or correlated) with Dongrui Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongrui Food Group has no effect on the direction of New China i.e., New China and Dongrui Food go up and down completely randomly.
Pair Corralation between New China and Dongrui Food
Assuming the 90 days trading horizon New China is expected to generate 1.9 times less return on investment than Dongrui Food. In addition to that, New China is 1.41 times more volatile than Dongrui Food Group. It trades about 0.01 of its total potential returns per unit of risk. Dongrui Food Group is currently generating about 0.04 per unit of volatility. If you would invest 1,685 in Dongrui Food Group on September 14, 2024 and sell it today you would earn a total of 21.00 from holding Dongrui Food Group or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
New China Life vs. Dongrui Food Group
Performance |
| Timeline |
| New China Life |
| Dongrui Food Group |
New China and Dongrui Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New China and Dongrui Food
The main advantage of trading using opposite New China and Dongrui Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New China position performs unexpectedly, Dongrui Food 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 Dongrui Food will offset losses from the drop in Dongrui Food's long position.| New China vs. Fujian Nanwang Environment | New China vs. Guangdong Silvere Sci | New China vs. Huaibei Mining Holdings | New China vs. Guocheng Mining Co |
| Dongrui Food vs. New China Life | Dongrui Food vs. Ming Yang Smart | Dongrui Food vs. 159681 | Dongrui Food vs. 159005 |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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