Correlation Between China Hongqiao and Ducommun Incorporated
Can any of the company-specific risk be diversified away by investing in both China Hongqiao and Ducommun Incorporated 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 Hongqiao and Ducommun Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Hongqiao Group and Ducommun Incorporated, you can compare the effects of market volatilities on China Hongqiao and Ducommun Incorporated 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 Hongqiao with a short position of Ducommun Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Hongqiao and Ducommun Incorporated.
Diversification Opportunities for China Hongqiao and Ducommun Incorporated
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Ducommun is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Hongqiao Group and Ducommun Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ducommun Incorporated and China Hongqiao 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 Hongqiao Group are associated (or correlated) with Ducommun Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ducommun Incorporated has no effect on the direction of China Hongqiao i.e., China Hongqiao and Ducommun Incorporated go up and down completely randomly.
Pair Corralation between China Hongqiao and Ducommun Incorporated
If you would invest 6,496 in Ducommun Incorporated on November 9, 2024 and sell it today you would earn a total of 177.00 from holding Ducommun Incorporated or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
China Hongqiao Group vs. Ducommun Incorporated
Performance |
| Timeline |
| China Hongqiao Group |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Ducommun Incorporated |
China Hongqiao and Ducommun Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Hongqiao and Ducommun Incorporated
The main advantage of trading using opposite China Hongqiao and Ducommun Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Hongqiao position performs unexpectedly, Ducommun Incorporated 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 Ducommun Incorporated will offset losses from the drop in Ducommun Incorporated's long position.| China Hongqiao vs. Constellium Nv | China Hongqiao vs. Century Aluminum | China Hongqiao vs. Alcoa Corp | China Hongqiao vs. China Hongqiao Group |
| Ducommun Incorporated vs. Innovative Solutions and | Ducommun Incorporated vs. National Presto Industries | Ducommun Incorporated vs. Astronics | Ducommun Incorporated vs. Park Electrochemical |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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