Correlation Between Beijing Kingsoft and Dongfeng Automobile
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By analyzing existing cross correlation between Beijing Kingsoft Office and Dongfeng Automobile Co, you can compare the effects of market volatilities on Beijing Kingsoft 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 Beijing Kingsoft with a short position of Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Kingsoft and Dongfeng Automobile.
Diversification Opportunities for Beijing Kingsoft and Dongfeng Automobile
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Beijing and Dongfeng is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Kingsoft Office and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile and Beijing Kingsoft 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 Beijing Kingsoft Office 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 Beijing Kingsoft i.e., Beijing Kingsoft and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Beijing Kingsoft and Dongfeng Automobile
Assuming the 90 days trading horizon Beijing Kingsoft Office is expected to generate 1.3 times more return on investment than Dongfeng Automobile. However, Beijing Kingsoft is 1.3 times more volatile than Dongfeng Automobile Co. It trades about 0.02 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 30,251 in Beijing Kingsoft Office on October 29, 2024 and sell it today you would earn a total of 252.00 from holding Beijing Kingsoft Office or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Kingsoft Office vs. Dongfeng Automobile Co
Performance |
| Timeline |
| Beijing Kingsoft Office |
| Dongfeng Automobile |
Beijing Kingsoft and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Kingsoft and Dongfeng Automobile
The main advantage of trading using opposite Beijing Kingsoft and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Kingsoft 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.| Beijing Kingsoft vs. Shantui Construction Machinery | Beijing Kingsoft vs. Anhui Huilong Agricultural | Beijing Kingsoft vs. Qumei Furniture Group | Beijing Kingsoft vs. Nanxing Furniture Machinery |
| Dongfeng Automobile vs. Guangzhou Jinyi Media | Dongfeng Automobile vs. Xinxiang Chemical Fiber | Dongfeng Automobile vs. Omnijoi Media Corp | Dongfeng Automobile vs. Liaoning Dingjide Petrochemical |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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