Correlation Between Zhejiang HISUN and Dongfeng Automobile
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By analyzing existing cross correlation between Zhejiang HISUN Biomaterials and Dongfeng Automobile Co, you can compare the effects of market volatilities on Zhejiang HISUN 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 Zhejiang HISUN with a short position of Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang HISUN and Dongfeng Automobile.
Diversification Opportunities for Zhejiang HISUN and Dongfeng Automobile
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and Dongfeng is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang HISUN Biomaterials and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile and Zhejiang HISUN 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 Zhejiang HISUN Biomaterials 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 Zhejiang HISUN i.e., Zhejiang HISUN and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Zhejiang HISUN and Dongfeng Automobile
Assuming the 90 days trading horizon Zhejiang HISUN Biomaterials is expected to generate 0.53 times more return on investment than Dongfeng Automobile. However, Zhejiang HISUN Biomaterials is 1.9 times less risky than Dongfeng Automobile. It trades about -0.09 of its potential returns per unit of risk. Dongfeng Automobile Co is currently generating about -0.06 per unit of risk. If you would invest 1,049 in Zhejiang HISUN Biomaterials on October 30, 2024 and sell it today you would lose (68.00) from holding Zhejiang HISUN Biomaterials or give up 6.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang HISUN Biomaterials vs. Dongfeng Automobile Co
Performance |
| Timeline |
| Zhejiang HISUN Bioma |
| Dongfeng Automobile |
Zhejiang HISUN and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang HISUN and Dongfeng Automobile
The main advantage of trading using opposite Zhejiang HISUN and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang HISUN 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.| Zhejiang HISUN vs. Zijin Mining Group | Zhejiang HISUN vs. Wanhua Chemical Group | Zhejiang HISUN vs. Baoshan Iron Steel | Zhejiang HISUN vs. Shandong Gold Mining |
| Dongfeng Automobile vs. Miracll Chemicals Co | Dongfeng Automobile vs. Aba Chemicals Corp | Dongfeng Automobile vs. Dr Peng Telecom | Dongfeng Automobile vs. Ziel Home Furnishing |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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