Correlation Between DONGJIANG ENVIRONMENTAL and DICKS Sporting
Can any of the company-specific risk be diversified away by investing in both DONGJIANG ENVIRONMENTAL and DICKS Sporting 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 DICKS Sporting 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 DICKS Sporting Goods, you can compare the effects of market volatilities on DONGJIANG ENVIRONMENTAL and DICKS Sporting 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 DICKS Sporting. Check out your portfolio center. Please also check ongoing floating volatility patterns of DONGJIANG ENVIRONMENTAL and DICKS Sporting.
Diversification Opportunities for DONGJIANG ENVIRONMENTAL and DICKS Sporting
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DONGJIANG and DICKS is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding DONGJIANG ENVIRONMENTAL H and DICKS Sporting Goods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DICKS Sporting Goods 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 DICKS Sporting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DICKS Sporting Goods has no effect on the direction of DONGJIANG ENVIRONMENTAL i.e., DONGJIANG ENVIRONMENTAL and DICKS Sporting go up and down completely randomly.
Pair Corralation between DONGJIANG ENVIRONMENTAL and DICKS Sporting
Assuming the 90 days horizon DONGJIANG ENVIRONMENTAL is expected to generate 3.63 times less return on investment than DICKS Sporting. In addition to that, DONGJIANG ENVIRONMENTAL is 1.81 times more volatile than DICKS Sporting Goods. It trades about 0.01 of its total potential returns per unit of risk. DICKS Sporting Goods is currently generating about 0.07 per unit of volatility. If you would invest 10,959 in DICKS Sporting Goods on October 14, 2024 and sell it today you would earn a total of 11,481 from holding DICKS Sporting Goods or generate 104.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DONGJIANG ENVIRONMENTAL H vs. DICKS Sporting Goods
Performance |
| Timeline |
| DONGJIANG ENVIRONMENTAL |
| DICKS Sporting Goods |
DONGJIANG ENVIRONMENTAL and DICKS Sporting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DONGJIANG ENVIRONMENTAL and DICKS Sporting
The main advantage of trading using opposite DONGJIANG ENVIRONMENTAL and DICKS Sporting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DONGJIANG ENVIRONMENTAL position performs unexpectedly, DICKS Sporting 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 DICKS Sporting will offset losses from the drop in DICKS Sporting's long position.| DONGJIANG ENVIRONMENTAL vs. H2O Retailing | DONGJIANG ENVIRONMENTAL vs. AAC TECHNOLOGHLDGADR | DONGJIANG ENVIRONMENTAL vs. CarsalesCom | DONGJIANG ENVIRONMENTAL vs. SIEM OFFSHORE NEW |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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