Correlation Between Shenzhen Fortune and Dongfeng Automobile
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By analyzing existing cross correlation between Shenzhen Fortune Trend and Dongfeng Automobile Co, you can compare the effects of market volatilities on Shenzhen Fortune 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 Shenzhen Fortune with a short position of Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Fortune and Dongfeng Automobile.
Diversification Opportunities for Shenzhen Fortune and Dongfeng Automobile
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Dongfeng is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Fortune Trend and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile and Shenzhen Fortune 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 Shenzhen Fortune Trend 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 Shenzhen Fortune i.e., Shenzhen Fortune and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Shenzhen Fortune and Dongfeng Automobile
Assuming the 90 days trading horizon Shenzhen Fortune Trend is expected to generate 1.53 times more return on investment than Dongfeng Automobile. However, Shenzhen Fortune is 1.53 times more volatile than Dongfeng Automobile Co. It trades about 0.05 of its potential returns per unit of risk. Dongfeng Automobile Co is currently generating about 0.04 per unit of risk. If you would invest 13,998 in Shenzhen Fortune Trend on September 15, 2024 and sell it today you would earn a total of 4,522 from holding Shenzhen Fortune Trend or generate 32.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Fortune Trend vs. Dongfeng Automobile Co
Performance |
| Timeline |
| Shenzhen Fortune Trend |
| Dongfeng Automobile |
Shenzhen Fortune and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Fortune and Dongfeng Automobile
The main advantage of trading using opposite Shenzhen Fortune and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Fortune 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.| Shenzhen Fortune vs. Ming Yang Smart | Shenzhen Fortune vs. 159681 | Shenzhen Fortune vs. 159005 | Shenzhen Fortune vs. Loctek Ergonomic Technology |
| Dongfeng Automobile vs. Cambricon Technologies Corp | Dongfeng Automobile vs. Loongson Technology Corp | Dongfeng Automobile vs. Shenzhen Fortune Trend | Dongfeng Automobile vs. Chongqing Road Bridge |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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