Correlation Between Healthcare and Dongfeng Automobile
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By analyzing existing cross correlation between Healthcare Co and Dongfeng Automobile Co, you can compare the effects of market volatilities on Healthcare 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 Healthcare with a short position of Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare and Dongfeng Automobile.
Diversification Opportunities for Healthcare and Dongfeng Automobile
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Healthcare and Dongfeng is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Co and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile and Healthcare 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 Healthcare Co 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 Healthcare i.e., Healthcare and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Healthcare and Dongfeng Automobile
Assuming the 90 days trading horizon Healthcare Co is expected to generate 0.68 times more return on investment than Dongfeng Automobile. However, Healthcare Co is 1.46 times less risky than Dongfeng Automobile. It trades about 0.24 of its potential returns per unit of risk. Dongfeng Automobile Co is currently generating about 0.13 per unit of risk. If you would invest 635.00 in Healthcare Co on September 1, 2024 and sell it today you would earn a total of 104.00 from holding Healthcare Co or generate 16.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Healthcare Co vs. Dongfeng Automobile Co
Performance |
| Timeline |
| Healthcare |
| Dongfeng Automobile |
Healthcare and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthcare and Dongfeng Automobile
The main advantage of trading using opposite Healthcare and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare 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.| Healthcare vs. Kweichow Moutai Co | Healthcare vs. NAURA Technology Group | Healthcare vs. Zhejiang Orient Gene | Healthcare vs. APT Medical |
| Dongfeng Automobile vs. China Life Insurance | Dongfeng Automobile vs. Cicc Fund Management | Dongfeng Automobile vs. Metro Investment Development | Dongfeng Automobile vs. Zhongrun Resources Investment |
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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