Correlation Between DONGJIANG ENVIRONMENTAL and Aedas Homes
Can any of the company-specific risk be diversified away by investing in both DONGJIANG ENVIRONMENTAL and Aedas Homes 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 DONGJIANG ENVIRONMENTAL and Aedas Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DONGJIANG ENVIRONMENTAL H and Aedas Homes SA, you can compare the effects of market volatilities on DONGJIANG ENVIRONMENTAL and Aedas Homes 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 DONGJIANG ENVIRONMENTAL with a short position of Aedas Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of DONGJIANG ENVIRONMENTAL and Aedas Homes.
Diversification Opportunities for DONGJIANG ENVIRONMENTAL and Aedas Homes
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DONGJIANG and Aedas is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding DONGJIANG ENVIRONMENTAL H and Aedas Homes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aedas Homes SA and DONGJIANG ENVIRONMENTAL 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 DONGJIANG ENVIRONMENTAL H are associated (or correlated) with Aedas Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aedas Homes SA has no effect on the direction of DONGJIANG ENVIRONMENTAL i.e., DONGJIANG ENVIRONMENTAL and Aedas Homes go up and down completely randomly.
Pair Corralation between DONGJIANG ENVIRONMENTAL and Aedas Homes
Assuming the 90 days horizon DONGJIANG ENVIRONMENTAL H is expected to under-perform the Aedas Homes. In addition to that, DONGJIANG ENVIRONMENTAL is 1.37 times more volatile than Aedas Homes SA. It trades about -0.26 of its total potential returns per unit of risk. Aedas Homes SA is currently generating about 0.22 per unit of volatility. If you would invest 2,363 in Aedas Homes SA on October 30, 2024 and sell it today you would earn a total of 422.00 from holding Aedas Homes SA or generate 17.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DONGJIANG ENVIRONMENTAL H vs. Aedas Homes SA
Performance |
| Timeline |
| DONGJIANG ENVIRONMENTAL |
| Aedas Homes SA |
DONGJIANG ENVIRONMENTAL and Aedas Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DONGJIANG ENVIRONMENTAL and Aedas Homes
The main advantage of trading using opposite DONGJIANG ENVIRONMENTAL and Aedas Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DONGJIANG ENVIRONMENTAL position performs unexpectedly, Aedas Homes 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 Aedas Homes will offset losses from the drop in Aedas Homes' long position.| DONGJIANG ENVIRONMENTAL vs. MGIC INVESTMENT | DONGJIANG ENVIRONMENTAL vs. Japan Asia Investment | DONGJIANG ENVIRONMENTAL vs. JLF INVESTMENT | DONGJIANG ENVIRONMENTAL vs. MidCap Financial Investment |
| Aedas Homes vs. alstria office REIT AG | Aedas Homes vs. CITY OFFICE REIT | Aedas Homes vs. KENEDIX OFFICE INV | Aedas Homes vs. American Homes 4 |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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