Correlation Between DONGJIANG ENVIRONMENTAL and DISTRICT METALS
Can any of the company-specific risk be diversified away by investing in both DONGJIANG ENVIRONMENTAL and DISTRICT METALS 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 DISTRICT METALS 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 DISTRICT METALS, you can compare the effects of market volatilities on DONGJIANG ENVIRONMENTAL and DISTRICT METALS 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 DISTRICT METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of DONGJIANG ENVIRONMENTAL and DISTRICT METALS.
Diversification Opportunities for DONGJIANG ENVIRONMENTAL and DISTRICT METALS
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DONGJIANG and DISTRICT is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding DONGJIANG ENVIRONMENTAL H and DISTRICT METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DISTRICT METALS 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 DISTRICT METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DISTRICT METALS has no effect on the direction of DONGJIANG ENVIRONMENTAL i.e., DONGJIANG ENVIRONMENTAL and DISTRICT METALS go up and down completely randomly.
Pair Corralation between DONGJIANG ENVIRONMENTAL and DISTRICT METALS
Assuming the 90 days horizon DONGJIANG ENVIRONMENTAL is expected to generate 20.49 times less return on investment than DISTRICT METALS. But when comparing it to its historical volatility, DONGJIANG ENVIRONMENTAL H is 1.76 times less risky than DISTRICT METALS. It trades about 0.01 of its potential returns per unit of risk. DISTRICT METALS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5.95 in DISTRICT METALS on October 16, 2024 and sell it today you would earn a total of 19.05 from holding DISTRICT METALS or generate 320.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DONGJIANG ENVIRONMENTAL H vs. DISTRICT METALS
Performance |
| Timeline |
| DONGJIANG ENVIRONMENTAL |
| DISTRICT METALS |
DONGJIANG ENVIRONMENTAL and DISTRICT METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DONGJIANG ENVIRONMENTAL and DISTRICT METALS
The main advantage of trading using opposite DONGJIANG ENVIRONMENTAL and DISTRICT METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DONGJIANG ENVIRONMENTAL position performs unexpectedly, DISTRICT METALS 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 DISTRICT METALS will offset losses from the drop in DISTRICT METALS's long position.| DONGJIANG ENVIRONMENTAL vs. JIAHUA STORES | DONGJIANG ENVIRONMENTAL vs. FAST RETAIL ADR | DONGJIANG ENVIRONMENTAL vs. AEON STORES | DONGJIANG ENVIRONMENTAL vs. BJs Wholesale Club |
| DISTRICT METALS vs. DONGJIANG ENVIRONMENTAL H | DISTRICT METALS vs. DALATA HOTEL | DISTRICT METALS vs. United States Steel | DISTRICT METALS vs. Xiwang Special Steel |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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