Correlation Between Touchstone International and Dongfeng Automobile
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By analyzing existing cross correlation between Touchstone International Medical and Dongfeng Automobile Co, you can compare the effects of market volatilities on Touchstone International 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 Touchstone International with a short position of Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone International and Dongfeng Automobile.
Diversification Opportunities for Touchstone International and Dongfeng Automobile
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Touchstone and Dongfeng is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone International Medic and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile and Touchstone International 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 Touchstone International Medical 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 Touchstone International i.e., Touchstone International and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Touchstone International and Dongfeng Automobile
Assuming the 90 days trading horizon Touchstone International Medical is expected to generate 0.71 times more return on investment than Dongfeng Automobile. However, Touchstone International Medical is 1.42 times less risky than Dongfeng Automobile. It trades about 0.4 of its potential returns per unit of risk. Dongfeng Automobile Co is currently generating about -0.07 per unit of risk. If you would invest 1,674 in Touchstone International Medical on November 4, 2024 and sell it today you would earn a total of 215.00 from holding Touchstone International Medical or generate 12.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone International Medic vs. Dongfeng Automobile Co
Performance |
| Timeline |
| Touchstone International |
| Dongfeng Automobile |
Touchstone International and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone International and Dongfeng Automobile
The main advantage of trading using opposite Touchstone International and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone International 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.| Touchstone International vs. Industrial and Commercial | Touchstone International vs. China Construction Bank | Touchstone International vs. Agricultural Bank of | Touchstone International vs. Bank of China |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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