Correlation Between Jiangsu GDK and Dongfeng Automobile
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By analyzing existing cross correlation between Jiangsu GDK Biotechnology and Dongfeng Automobile Co, you can compare the effects of market volatilities on Jiangsu GDK 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 Jiangsu GDK with a short position of Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu GDK and Dongfeng Automobile.
Diversification Opportunities for Jiangsu GDK and Dongfeng Automobile
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jiangsu and Dongfeng is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu GDK Biotechnology and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile and Jiangsu GDK 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 Jiangsu GDK Biotechnology 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 Jiangsu GDK i.e., Jiangsu GDK and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Jiangsu GDK and Dongfeng Automobile
Assuming the 90 days trading horizon Jiangsu GDK Biotechnology is expected to under-perform the Dongfeng Automobile. In addition to that, Jiangsu GDK is 1.24 times more volatile than Dongfeng Automobile Co. It trades about -0.05 of its total potential returns per unit of risk. Dongfeng Automobile Co is currently generating about 0.04 per unit of volatility. If you would invest 625.00 in Dongfeng Automobile Co on September 2, 2024 and sell it today you would earn a total of 111.00 from holding Dongfeng Automobile Co or generate 17.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu GDK Biotechnology vs. Dongfeng Automobile Co
Performance |
| Timeline |
| Jiangsu GDK Biotechnology |
| Dongfeng Automobile |
Jiangsu GDK and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu GDK and Dongfeng Automobile
The main advantage of trading using opposite Jiangsu GDK and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu GDK 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.| Jiangsu GDK vs. PetroChina Co Ltd | Jiangsu GDK vs. China Mobile Limited | Jiangsu GDK vs. CNOOC Limited | Jiangsu GDK vs. Ping An Insurance |
| Dongfeng Automobile vs. Biwin Storage Technology | Dongfeng Automobile vs. PetroChina Co Ltd | Dongfeng Automobile vs. Industrial and Commercial | Dongfeng Automobile vs. China Construction Bank |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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