Correlation Between Japan Asia and DONGJIANG ENVIRONMENTAL
Can any of the company-specific risk be diversified away by investing in both Japan Asia and DONGJIANG ENVIRONMENTAL 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 Japan Asia and DONGJIANG ENVIRONMENTAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Asia Investment and DONGJIANG ENVIRONMENTAL H, you can compare the effects of market volatilities on Japan Asia and DONGJIANG ENVIRONMENTAL 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 Japan Asia with a short position of DONGJIANG ENVIRONMENTAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Asia and DONGJIANG ENVIRONMENTAL.
Diversification Opportunities for Japan Asia and DONGJIANG ENVIRONMENTAL
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Japan and DONGJIANG is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Japan Asia Investment and DONGJIANG ENVIRONMENTAL H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DONGJIANG ENVIRONMENTAL and Japan Asia 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 Japan Asia Investment are associated (or correlated) with DONGJIANG ENVIRONMENTAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DONGJIANG ENVIRONMENTAL has no effect on the direction of Japan Asia i.e., Japan Asia and DONGJIANG ENVIRONMENTAL go up and down completely randomly.
Pair Corralation between Japan Asia and DONGJIANG ENVIRONMENTAL
Assuming the 90 days horizon Japan Asia Investment is expected to under-perform the DONGJIANG ENVIRONMENTAL. But the stock apears to be less risky and, when comparing its historical volatility, Japan Asia Investment is 4.11 times less risky than DONGJIANG ENVIRONMENTAL. The stock trades about -0.05 of its potential returns per unit of risk. The DONGJIANG ENVIRONMENTAL H is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 20.00 in DONGJIANG ENVIRONMENTAL H on November 7, 2024 and sell it today you would earn a total of 1.00 from holding DONGJIANG ENVIRONMENTAL H or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Japan Asia Investment vs. DONGJIANG ENVIRONMENTAL H
Performance |
| Timeline |
| Japan Asia Investment |
| DONGJIANG ENVIRONMENTAL |
Japan Asia and DONGJIANG ENVIRONMENTAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Asia and DONGJIANG ENVIRONMENTAL
The main advantage of trading using opposite Japan Asia and DONGJIANG ENVIRONMENTAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Asia position performs unexpectedly, DONGJIANG ENVIRONMENTAL 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 DONGJIANG ENVIRONMENTAL will offset losses from the drop in DONGJIANG ENVIRONMENTAL's long position.| Japan Asia vs. STMicroelectronics NV | Japan Asia vs. Media and Games | Japan Asia vs. Samsung Electronics Co | Japan Asia vs. LPKF Laser Electronics |
| DONGJIANG ENVIRONMENTAL vs. Addtech AB | DONGJIANG ENVIRONMENTAL vs. CARSALESCOM | DONGJIANG ENVIRONMENTAL vs. CarsalesCom | DONGJIANG ENVIRONMENTAL vs. Sunny Optical Technology |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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