Correlation Between Ducommun Incorporated and China Hongqiao
Can any of the company-specific risk be diversified away by investing in both Ducommun Incorporated and China Hongqiao 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 Ducommun Incorporated and China Hongqiao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ducommun Incorporated and China Hongqiao Group, you can compare the effects of market volatilities on Ducommun Incorporated and China Hongqiao 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 Ducommun Incorporated with a short position of China Hongqiao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ducommun Incorporated and China Hongqiao.
Diversification Opportunities for Ducommun Incorporated and China Hongqiao
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ducommun and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ducommun Incorporated and China Hongqiao Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Hongqiao Group and Ducommun Incorporated 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 Ducommun Incorporated are associated (or correlated) with China Hongqiao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Hongqiao Group has no effect on the direction of Ducommun Incorporated i.e., Ducommun Incorporated and China Hongqiao go up and down completely randomly.
Pair Corralation between Ducommun Incorporated and China Hongqiao
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 |
Ducommun Incorporated vs. China Hongqiao Group
Performance |
| Timeline |
| Ducommun Incorporated |
| China Hongqiao Group |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Ducommun Incorporated and China Hongqiao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ducommun Incorporated and China Hongqiao
The main advantage of trading using opposite Ducommun Incorporated and China Hongqiao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ducommun Incorporated position performs unexpectedly, China Hongqiao 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 China Hongqiao will offset losses from the drop in China Hongqiao's long position.| Ducommun Incorporated vs. Innovative Solutions and | Ducommun Incorporated vs. National Presto Industries | Ducommun Incorporated vs. Astronics | Ducommun Incorporated vs. Park Electrochemical |
| China Hongqiao vs. Constellium Nv | China Hongqiao vs. Century Aluminum | China Hongqiao vs. Alcoa Corp | China Hongqiao vs. China Hongqiao Group |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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