Correlation Between Huaibei Mining and Dongfeng Automobile
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By analyzing existing cross correlation between Huaibei Mining Holdings and Dongfeng Automobile Co, you can compare the effects of market volatilities on Huaibei Mining and Dongfeng Automobile 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 Huaibei Mining with a short position of Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huaibei Mining and Dongfeng Automobile.
Diversification Opportunities for Huaibei Mining and Dongfeng Automobile
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Huaibei and Dongfeng is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Huaibei Mining Holdings and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile and Huaibei Mining 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 Huaibei Mining Holdings are associated (or correlated) with Dongfeng Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongfeng Automobile has no effect on the direction of Huaibei Mining i.e., Huaibei Mining and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between Huaibei Mining and Dongfeng Automobile
Assuming the 90 days trading horizon Huaibei Mining Holdings is expected to under-perform the Dongfeng Automobile. But the stock apears to be less risky and, when comparing its historical volatility, Huaibei Mining Holdings is 1.59 times less risky than Dongfeng Automobile. The stock trades about -0.1 of its potential returns per unit of risk. The Dongfeng Automobile Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 622.00 in Dongfeng Automobile Co on September 26, 2024 and sell it today you would earn a total of 107.00 from holding Dongfeng Automobile Co or generate 17.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Huaibei Mining Holdings vs. Dongfeng Automobile Co
Performance |
Timeline |
Huaibei Mining Holdings |
Dongfeng Automobile |
Huaibei Mining and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Huaibei Mining and Dongfeng Automobile
The main advantage of trading using opposite Huaibei Mining and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huaibei Mining position performs unexpectedly, Dongfeng Automobile 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 Dongfeng Automobile will offset losses from the drop in Dongfeng Automobile's long position.Huaibei Mining vs. Zijin Mining Group | Huaibei Mining vs. Baoshan Iron Steel | Huaibei Mining vs. Shandong Gold Mining | Huaibei Mining vs. Rongsheng Petrochemical Co |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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