Correlation Between Eastroc Beverage and Dongfeng Automobile
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By analyzing existing cross correlation between Eastroc Beverage Group and Dongfeng Automobile Co, you can compare the effects of market volatilities on Eastroc Beverage 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 Eastroc Beverage with a short position of Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastroc Beverage and Dongfeng Automobile.
Diversification Opportunities for Eastroc Beverage and Dongfeng Automobile
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eastroc and Dongfeng is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Eastroc Beverage Group and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile and Eastroc Beverage 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 Eastroc Beverage Group 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 Eastroc Beverage i.e., Eastroc Beverage and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Eastroc Beverage and Dongfeng Automobile
Assuming the 90 days trading horizon Eastroc Beverage Group is expected to generate 0.68 times more return on investment than Dongfeng Automobile. However, Eastroc Beverage Group is 1.46 times less risky than Dongfeng Automobile. It trades about 0.07 of its potential returns per unit of risk. Dongfeng Automobile Co is currently generating about 0.02 per unit of risk. If you would invest 12,924 in Eastroc Beverage Group on October 29, 2024 and sell it today you would earn a total of 11,189 from holding Eastroc Beverage Group or generate 86.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastroc Beverage Group vs. Dongfeng Automobile Co
Performance |
| Timeline |
| Eastroc Beverage |
| Dongfeng Automobile |
Eastroc Beverage and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastroc Beverage and Dongfeng Automobile
The main advantage of trading using opposite Eastroc Beverage and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastroc Beverage 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.| Eastroc Beverage vs. Agricultural Bank of | Eastroc Beverage vs. Industrial and Commercial | Eastroc Beverage vs. Bank of China | Eastroc Beverage vs. China Construction Bank |
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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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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