Correlation Between DONGJIANG ENVIRONMENTAL and American Homes
Can any of the company-specific risk be diversified away by investing in both DONGJIANG ENVIRONMENTAL and American 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 American 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 American Homes 4, you can compare the effects of market volatilities on DONGJIANG ENVIRONMENTAL and American 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 American Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of DONGJIANG ENVIRONMENTAL and American Homes.
Diversification Opportunities for DONGJIANG ENVIRONMENTAL and American Homes
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between DONGJIANG and American is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding DONGJIANG ENVIRONMENTAL H and American Homes 4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Homes 4 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 American Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Homes 4 has no effect on the direction of DONGJIANG ENVIRONMENTAL i.e., DONGJIANG ENVIRONMENTAL and American Homes go up and down completely randomly.
Pair Corralation between DONGJIANG ENVIRONMENTAL and American Homes
Assuming the 90 days horizon DONGJIANG ENVIRONMENTAL H is expected to under-perform the American Homes. In addition to that, DONGJIANG ENVIRONMENTAL is 1.92 times more volatile than American Homes 4. It trades about -0.38 of its total potential returns per unit of risk. American Homes 4 is currently generating about -0.14 per unit of volatility. If you would invest 3,480 in American Homes 4 on October 17, 2024 and sell it today you would lose (120.00) from holding American Homes 4 or give up 3.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
DONGJIANG ENVIRONMENTAL H vs. American Homes 4
Performance |
| Timeline |
| DONGJIANG ENVIRONMENTAL |
| American Homes 4 |
DONGJIANG ENVIRONMENTAL and American Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DONGJIANG ENVIRONMENTAL and American Homes
The main advantage of trading using opposite DONGJIANG ENVIRONMENTAL and American Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DONGJIANG ENVIRONMENTAL position performs unexpectedly, American 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 American Homes will offset losses from the drop in American Homes' long position.| DONGJIANG ENVIRONMENTAL vs. CN DATANG C | DONGJIANG ENVIRONMENTAL vs. INFORMATION SVC GRP | DONGJIANG ENVIRONMENTAL vs. SILVER BULLET DATA | DONGJIANG ENVIRONMENTAL vs. American Airlines Group |
| American Homes vs. PLAYSTUDIOS A DL 0001 | American Homes vs. Tianjin Capital Environmental | American Homes vs. DONGJIANG ENVIRONMENTAL H | American Homes vs. Khiron Life Sciences |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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