Correlation Between Danhua Chemical and Dr Peng
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By analyzing existing cross correlation between Danhua Chemical Technology and Dr Peng Telecom, you can compare the effects of market volatilities on Danhua Chemical and Dr Peng 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 Danhua Chemical with a short position of Dr Peng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danhua Chemical and Dr Peng.
Diversification Opportunities for Danhua Chemical and Dr Peng
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Danhua and 600804 is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Danhua Chemical Technology and Dr Peng Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dr Peng Telecom and Danhua Chemical 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 Danhua Chemical Technology are associated (or correlated) with Dr Peng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dr Peng Telecom has no effect on the direction of Danhua Chemical i.e., Danhua Chemical and Dr Peng go up and down completely randomly.
Pair Corralation between Danhua Chemical and Dr Peng
Assuming the 90 days trading horizon Danhua Chemical Technology is expected to generate 0.89 times more return on investment than Dr Peng. However, Danhua Chemical Technology is 1.13 times less risky than Dr Peng. It trades about -0.12 of its potential returns per unit of risk. Dr Peng Telecom is currently generating about -0.15 per unit of risk. If you would invest 14.00 in Danhua Chemical Technology on November 3, 2024 and sell it today you would lose (1.00) from holding Danhua Chemical Technology or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Danhua Chemical Technology vs. Dr Peng Telecom
Performance |
| Timeline |
| Danhua Chemical Tech |
| Dr Peng Telecom |
Danhua Chemical and Dr Peng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danhua Chemical and Dr Peng
The main advantage of trading using opposite Danhua Chemical and Dr Peng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danhua Chemical position performs unexpectedly, Dr Peng 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 Dr Peng will offset losses from the drop in Dr Peng's long position.| Danhua Chemical vs. Jilin OLED Material | Danhua Chemical vs. Shenzhen Cotran New | Danhua Chemical vs. Hua Hong Semiconductor | Danhua Chemical vs. Yuanjie Semiconductor Technology |
| Dr Peng vs. Shandong Kuntai New | Dr Peng vs. Xinjiang Qingsong Building | Dr Peng vs. Orinko Advanced Plastics | Dr Peng vs. Jiangsu Financial Leasing |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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