Correlation Between Dongfeng Automobile and Hainan Pearl
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By analyzing existing cross correlation between Dongfeng Automobile Co and Hainan Pearl River, you can compare the effects of market volatilities on Dongfeng Automobile and Hainan Pearl 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 Dongfeng Automobile with a short position of Hainan Pearl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Hainan Pearl.
Diversification Opportunities for Dongfeng Automobile and Hainan Pearl
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongfeng and Hainan is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Hainan Pearl River in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Pearl River and Dongfeng Automobile 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 Dongfeng Automobile Co are associated (or correlated) with Hainan Pearl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Pearl River has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and Hainan Pearl go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Hainan Pearl
Assuming the 90 days trading horizon Dongfeng Automobile Co is expected to generate 1.88 times more return on investment than Hainan Pearl. However, Dongfeng Automobile is 1.88 times more volatile than Hainan Pearl River. It trades about 0.03 of its potential returns per unit of risk. Hainan Pearl River is currently generating about -0.02 per unit of risk. If you would invest 712.00 in Dongfeng Automobile Co on December 25, 2024 and sell it today you would earn a total of 18.00 from holding Dongfeng Automobile Co or generate 2.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Dongfeng Automobile Co vs. Hainan Pearl River
Performance |
Timeline |
Dongfeng Automobile |
Hainan Pearl River |
Dongfeng Automobile and Hainan Pearl Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dongfeng Automobile and Hainan Pearl
The main advantage of trading using opposite Dongfeng Automobile and Hainan Pearl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, Hainan Pearl 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 Hainan Pearl will offset losses from the drop in Hainan Pearl's long position.Dongfeng Automobile vs. Jiahe Foods Industry | Dongfeng Automobile vs. Hubei Geoway Investment | Dongfeng Automobile vs. Panda Dairy Corp | Dongfeng Automobile vs. Guilin Seamild Foods |
Hainan Pearl vs. Yingde Greatchem Chemicals | Hainan Pearl vs. BlueFocus Communication Group | Hainan Pearl vs. Dalian Zeus Entertainment | Hainan Pearl vs. Shandong Polymer Biochemicals |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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