Correlation Between Dongnan Electronics and China Marine
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By analyzing existing cross correlation between Dongnan Electronics Co and China Marine Information, you can compare the effects of market volatilities on Dongnan Electronics and China Marine 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 Dongnan Electronics with a short position of China Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongnan Electronics and China Marine.
Diversification Opportunities for Dongnan Electronics and China Marine
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongnan and China is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Dongnan Electronics Co and China Marine Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Marine Information and Dongnan Electronics 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 Dongnan Electronics Co are associated (or correlated) with China Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Marine Information has no effect on the direction of Dongnan Electronics i.e., Dongnan Electronics and China Marine go up and down completely randomly.
Pair Corralation between Dongnan Electronics and China Marine
Assuming the 90 days trading horizon Dongnan Electronics is expected to generate 1.05 times less return on investment than China Marine. In addition to that, Dongnan Electronics is 1.33 times more volatile than China Marine Information. It trades about 0.02 of its total potential returns per unit of risk. China Marine Information is currently generating about 0.03 per unit of volatility. If you would invest 2,341 in China Marine Information on September 26, 2024 and sell it today you would earn a total of 573.00 from holding China Marine Information or generate 24.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Dongnan Electronics Co vs. China Marine Information
Performance |
Timeline |
Dongnan Electronics |
China Marine Information |
Dongnan Electronics and China Marine Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dongnan Electronics and China Marine
The main advantage of trading using opposite Dongnan Electronics and China Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongnan Electronics position performs unexpectedly, China Marine 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 China Marine will offset losses from the drop in China Marine's long position.Dongnan Electronics vs. Kweichow Moutai Co | Dongnan Electronics vs. Contemporary Amperex Technology | Dongnan Electronics vs. G bits Network Technology | Dongnan Electronics vs. BYD Co Ltd |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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