Correlation Between China State and Dongguan Aohai
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By analyzing existing cross correlation between China State Construction and Dongguan Aohai Technology, you can compare the effects of market volatilities on China State and Dongguan Aohai 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 China State with a short position of Dongguan Aohai. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Dongguan Aohai.
Diversification Opportunities for China State and Dongguan Aohai
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Dongguan is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Dongguan Aohai Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongguan Aohai Technology and China State 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 China State Construction are associated (or correlated) with Dongguan Aohai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongguan Aohai Technology has no effect on the direction of China State i.e., China State and Dongguan Aohai go up and down completely randomly.
Pair Corralation between China State and Dongguan Aohai
Assuming the 90 days trading horizon China State Construction is expected to under-perform the Dongguan Aohai. But the stock apears to be less risky and, when comparing its historical volatility, China State Construction is 3.26 times less risky than Dongguan Aohai. The stock trades about -0.41 of its potential returns per unit of risk. The Dongguan Aohai Technology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,007 in Dongguan Aohai Technology on October 25, 2024 and sell it today you would earn a total of 15.00 from holding Dongguan Aohai Technology or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
China State Construction vs. Dongguan Aohai Technology
Performance |
| Timeline |
| China State Construction |
| Dongguan Aohai Technology |
China State and Dongguan Aohai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Dongguan Aohai
The main advantage of trading using opposite China State and Dongguan Aohai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Dongguan Aohai 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 Aohai will offset losses from the drop in Dongguan Aohai's long position.| China State vs. Ligao Foods CoLtd | China State vs. Xiwang Foodstuffs Co | China State vs. Penyao Environmental Protection | China State vs. GreenTech Environmental Co |
| Dongguan Aohai vs. Huaxia Fund Management | Dongguan Aohai vs. YiDong Electronics Technology | Dongguan Aohai vs. JCHX Mining Management | Dongguan Aohai vs. Cicc Fund Management |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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