Correlation Between Dazhong Transportation and Fujian Oriental
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By analyzing existing cross correlation between Dazhong Transportation Group and Fujian Oriental Silver, you can compare the effects of market volatilities on Dazhong Transportation and Fujian Oriental 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 Dazhong Transportation with a short position of Fujian Oriental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dazhong Transportation and Fujian Oriental.
Diversification Opportunities for Dazhong Transportation and Fujian Oriental
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dazhong and Fujian is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Dazhong Transportation Group and Fujian Oriental Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Oriental Silver and Dazhong Transportation 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 Dazhong Transportation Group are associated (or correlated) with Fujian Oriental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Oriental Silver has no effect on the direction of Dazhong Transportation i.e., Dazhong Transportation and Fujian Oriental go up and down completely randomly.
Pair Corralation between Dazhong Transportation and Fujian Oriental
Assuming the 90 days trading horizon Dazhong Transportation Group is expected to generate 0.66 times more return on investment than Fujian Oriental. However, Dazhong Transportation Group is 1.52 times less risky than Fujian Oriental. It trades about -0.17 of its potential returns per unit of risk. Fujian Oriental Silver is currently generating about -0.15 per unit of risk. If you would invest 26.00 in Dazhong Transportation Group on October 12, 2024 and sell it today you would lose (4.00) from holding Dazhong Transportation Group or give up 15.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dazhong Transportation Group vs. Fujian Oriental Silver
Performance |
| Timeline |
| Dazhong Transportation |
| Fujian Oriental Silver |
Dazhong Transportation and Fujian Oriental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dazhong Transportation and Fujian Oriental
The main advantage of trading using opposite Dazhong Transportation and Fujian Oriental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dazhong Transportation position performs unexpectedly, Fujian Oriental 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 Fujian Oriental will offset losses from the drop in Fujian Oriental's long position.| Dazhong Transportation vs. Tianshui Huatian Technology | Dazhong Transportation vs. China National Software | Dazhong Transportation vs. Dhc Software Co | Dazhong Transportation vs. Servyou Software Group |
| Fujian Oriental vs. Jointo Energy Investment | Fujian Oriental vs. Heilongjiang Transport Development | Fujian Oriental vs. Dazhong Transportation Group | Fujian Oriental vs. Shanghai Broadband Technology |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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