Correlation Between Dongfeng Automobile and Guilin Seamild
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By analyzing existing cross correlation between Dongfeng Automobile Co and Guilin Seamild Foods, you can compare the effects of market volatilities on Dongfeng Automobile and Guilin Seamild 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 Guilin Seamild. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Guilin Seamild.
Diversification Opportunities for Dongfeng Automobile and Guilin Seamild
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongfeng and Guilin is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Guilin Seamild Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guilin Seamild Foods 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 Guilin Seamild. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guilin Seamild Foods has no effect on the direction of Dongfeng Automobile i.e., Dongfeng Automobile and Guilin Seamild go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Guilin Seamild
Assuming the 90 days trading horizon Dongfeng Automobile is expected to generate 2.18 times less return on investment than Guilin Seamild. In addition to that, Dongfeng Automobile is 1.29 times more volatile than Guilin Seamild Foods. It trades about 0.05 of its total potential returns per unit of risk. Guilin Seamild Foods is currently generating about 0.15 per unit of volatility. If you would invest 1,237 in Guilin Seamild Foods on October 11, 2024 and sell it today you would earn a total of 335.00 from holding Guilin Seamild Foods or generate 27.08% 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. Guilin Seamild Foods
Performance |
Timeline |
Dongfeng Automobile |
Guilin Seamild Foods |
Dongfeng Automobile and Guilin Seamild Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dongfeng Automobile and Guilin Seamild
The main advantage of trading using opposite Dongfeng Automobile and Guilin Seamild positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile position performs unexpectedly, Guilin Seamild 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 Guilin Seamild will offset losses from the drop in Guilin Seamild's long position.Dongfeng Automobile vs. Guilin Seamild Foods | Dongfeng Automobile vs. Xiangpiaopiao Food Co | Dongfeng Automobile vs. Hainan Haiqi Transportation | Dongfeng Automobile vs. Chengdu Xinzhu RoadBridge |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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