Correlation Between Changshu Tongrun and Dongfeng Automobile
Specify exactly 2 symbols:
By analyzing existing cross correlation between Changshu Tongrun Auto and Dongfeng Automobile Co, you can compare the effects of market volatilities on Changshu Tongrun and Dongfeng Automobile 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 Changshu Tongrun with a short position of Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changshu Tongrun and Dongfeng Automobile.
Diversification Opportunities for Changshu Tongrun and Dongfeng Automobile
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Changshu and Dongfeng is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Changshu Tongrun Auto and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile and Changshu Tongrun 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 Changshu Tongrun Auto are associated (or correlated) with Dongfeng Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongfeng Automobile has no effect on the direction of Changshu Tongrun i.e., Changshu Tongrun and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Changshu Tongrun and Dongfeng Automobile
Assuming the 90 days trading horizon Changshu Tongrun is expected to generate 1.24 times less return on investment than Dongfeng Automobile. But when comparing it to its historical volatility, Changshu Tongrun Auto is 1.15 times less risky than Dongfeng Automobile. It trades about 0.02 of its potential returns per unit of risk. Dongfeng Automobile Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 620.00 in Dongfeng Automobile Co on August 25, 2024 and sell it today you would earn a total of 80.00 from holding Dongfeng Automobile Co or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Changshu Tongrun Auto vs. Dongfeng Automobile Co
Performance |
| Timeline |
| Changshu Tongrun Auto |
| Dongfeng Automobile |
Changshu Tongrun and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changshu Tongrun and Dongfeng Automobile
The main advantage of trading using opposite Changshu Tongrun and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changshu Tongrun position performs unexpectedly, Dongfeng Automobile 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 Dongfeng Automobile will offset losses from the drop in Dongfeng Automobile's long position.| Changshu Tongrun vs. Sichuan Teway Food | Changshu Tongrun vs. Beijing Sanyuan Foods | Changshu Tongrun vs. Jiajia Food Group | Changshu Tongrun vs. Bus Online Co |
| Dongfeng Automobile vs. Lutian Machinery Co | Dongfeng Automobile vs. China Longyuan Power | Dongfeng Automobile vs. Changshu Tongrun Auto | Dongfeng Automobile vs. PetroChina Co Ltd |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |