Correlation Between Dawning Information and Bohai Leasing
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By analyzing existing cross correlation between Dawning Information Industry and Bohai Leasing Co, you can compare the effects of market volatilities on Dawning Information and Bohai Leasing 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 Dawning Information with a short position of Bohai Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dawning Information and Bohai Leasing.
Diversification Opportunities for Dawning Information and Bohai Leasing
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dawning and Bohai is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Dawning Information Industry and Bohai Leasing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bohai Leasing and Dawning Information 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 Dawning Information Industry are associated (or correlated) with Bohai Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bohai Leasing has no effect on the direction of Dawning Information i.e., Dawning Information and Bohai Leasing go up and down completely randomly.
Pair Corralation between Dawning Information and Bohai Leasing
Assuming the 90 days trading horizon Dawning Information Industry is expected to generate 0.97 times more return on investment than Bohai Leasing. However, Dawning Information Industry is 1.03 times less risky than Bohai Leasing. It trades about 0.1 of its potential returns per unit of risk. Bohai Leasing Co is currently generating about 0.08 per unit of risk. If you would invest 4,443 in Dawning Information Industry on October 18, 2024 and sell it today you would earn a total of 2,006 from holding Dawning Information Industry or generate 45.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.17% |
| Values | Daily Returns |
Dawning Information Industry vs. Bohai Leasing Co
Performance |
| Timeline |
| Dawning Information |
| Bohai Leasing |
Dawning Information and Bohai Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dawning Information and Bohai Leasing
The main advantage of trading using opposite Dawning Information and Bohai Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dawning Information position performs unexpectedly, Bohai Leasing 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 Bohai Leasing will offset losses from the drop in Bohai Leasing's long position.The idea behind Dawning Information Industry and Bohai Leasing Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Bohai Leasing vs. Dawning Information Industry | Bohai Leasing vs. XiaMen HongXin Electron tech | Bohai Leasing vs. Emdoor Information Co | Bohai Leasing vs. Guangzhou Ruoyuchen Information |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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