Correlation Between China Dongsheng and V
Can any of the company-specific risk be diversified away by investing in both China Dongsheng and V at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining China Dongsheng and V into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Dongsheng International and V Group, you can compare the effects of market volatilities on China Dongsheng and V 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 China Dongsheng with a short position of V. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Dongsheng and V.
Diversification Opportunities for China Dongsheng and V
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and V is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Dongsheng International and V Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V Group and China Dongsheng 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 China Dongsheng International are associated (or correlated) with V. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V Group has no effect on the direction of China Dongsheng i.e., China Dongsheng and V go up and down completely randomly.
Pair Corralation between China Dongsheng and V
Given the investment horizon of 90 days China Dongsheng International is expected to generate 0.68 times more return on investment than V. However, China Dongsheng International is 1.47 times less risky than V. It trades about -0.09 of its potential returns per unit of risk. V Group is currently generating about -0.21 per unit of risk. If you would invest 0.18 in China Dongsheng International on September 12, 2024 and sell it today you would lose (0.07) from holding China Dongsheng International or give up 38.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
China Dongsheng International vs. V Group
Performance |
| Timeline |
| China Dongsheng Inte |
| V Group |
China Dongsheng and V Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Dongsheng and V
The main advantage of trading using opposite China Dongsheng and V positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Dongsheng position performs unexpectedly, V 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 V will offset losses from the drop in V's long position.| China Dongsheng vs. V Group | China Dongsheng vs. Fbec Worldwide | China Dongsheng vs. Hiru Corporation | China Dongsheng vs. Alkame Holdings |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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