Correlation Between Gemdale Corp and Dongxing Sec

Can any of the company-specific risk be diversified away by investing in both Gemdale Corp and Dongxing Sec 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 Gemdale Corp and Dongxing Sec into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gemdale Corp and Dongxing Sec Co, you can compare the effects of market volatilities on Gemdale Corp and Dongxing Sec 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 Gemdale Corp with a short position of Dongxing Sec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gemdale Corp and Dongxing Sec.

Diversification Opportunities for Gemdale Corp and Dongxing Sec

0.0

Correlation Coefficient

Gemdale Corp  Dongxing Sec

Pay attention - limited upside

The 3 months correlation between Gemdale and Dongxing is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gemdale Corp and Dongxing Sec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongxing Sec and Gemdale Corp 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 Gemdale Corp are associated (or correlated) with Dongxing Sec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongxing Sec has no effect on the direction of Gemdale Corp i.e., Gemdale Corp and Dongxing Sec go up and down completely randomly.

Pair Corralation between Gemdale Corp and Dongxing Sec

If you would invest  0.00  in Dongxing Sec Co on October 8, 2024 and sell it today you would earn a total of  0.00  from holding Dongxing Sec Co or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Gemdale Corp  vs.  Dongxing Sec Co

Gemdale Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gemdale Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Dongxing Sec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dongxing Sec Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Dongxing Sec is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gemdale Corp and Dongxing Sec

The main advantage of trading using opposite Gemdale Corp and Dongxing Sec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gemdale Corp position performs unexpectedly, Dongxing Sec 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 Dongxing Sec will offset losses from the drop in Dongxing Sec's long position.

The idea behind Gemdale Corp and Dongxing Sec Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.