Correlation Between Dazhong Transportation and Mengtian Home
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By analyzing existing cross correlation between Dazhong Transportation Group and Mengtian Home Group, you can compare the effects of market volatilities on Dazhong Transportation and Mengtian Home 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 Mengtian Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dazhong Transportation and Mengtian Home.
Diversification Opportunities for Dazhong Transportation and Mengtian Home
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dazhong and Mengtian is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Dazhong Transportation Group and Mengtian Home Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mengtian Home Group 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 Mengtian Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mengtian Home Group has no effect on the direction of Dazhong Transportation i.e., Dazhong Transportation and Mengtian Home go up and down completely randomly.
Pair Corralation between Dazhong Transportation and Mengtian Home
Assuming the 90 days trading horizon Dazhong Transportation Group is expected to generate 1.77 times more return on investment than Mengtian Home. However, Dazhong Transportation is 1.77 times more volatile than Mengtian Home Group. It trades about 0.15 of its potential returns per unit of risk. Mengtian Home Group is currently generating about 0.13 per unit of risk. If you would invest 18.00 in Dazhong Transportation Group on September 5, 2024 and sell it today you would earn a total of 8.00 from holding Dazhong Transportation Group or generate 44.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dazhong Transportation Group vs. Mengtian Home Group
Performance |
| Timeline |
| Dazhong Transportation |
| Mengtian Home Group |
Dazhong Transportation and Mengtian Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dazhong Transportation and Mengtian Home
The main advantage of trading using opposite Dazhong Transportation and Mengtian Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dazhong Transportation position performs unexpectedly, Mengtian Home 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 Mengtian Home will offset losses from the drop in Mengtian Home's long position.| Dazhong Transportation vs. Kweichow Moutai Co | Dazhong Transportation vs. NAURA Technology Group | Dazhong Transportation vs. Zhejiang Orient Gene | Dazhong Transportation vs. APT Medical |
| Mengtian Home vs. Industrial and Commercial | Mengtian Home vs. Agricultural Bank of | Mengtian Home vs. China Construction Bank | Mengtian Home vs. Bank of China |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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