Correlation Between Dongxing Sec and Zhonghong Pulin
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By analyzing existing cross correlation between Dongxing Sec Co and Zhonghong Pulin Medical, you can compare the effects of market volatilities on Dongxing Sec and Zhonghong Pulin 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 Dongxing Sec with a short position of Zhonghong Pulin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongxing Sec and Zhonghong Pulin.
Diversification Opportunities for Dongxing Sec and Zhonghong Pulin
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongxing and Zhonghong is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Dongxing Sec Co and Zhonghong Pulin Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhonghong Pulin Medical and Dongxing Sec 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 Dongxing Sec Co are associated (or correlated) with Zhonghong Pulin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhonghong Pulin Medical has no effect on the direction of Dongxing Sec i.e., Dongxing Sec and Zhonghong Pulin go up and down completely randomly.
Pair Corralation between Dongxing Sec and Zhonghong Pulin
Assuming the 90 days trading horizon Dongxing Sec Co is expected to generate 0.67 times more return on investment than Zhonghong Pulin. However, Dongxing Sec Co is 1.49 times less risky than Zhonghong Pulin. It trades about 0.02 of its potential returns per unit of risk. Zhonghong Pulin Medical is currently generating about -0.15 per unit of risk. If you would invest 1,129 in Dongxing Sec Co on September 19, 2024 and sell it today you would earn a total of 5.00 from holding Dongxing Sec Co or generate 0.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Dongxing Sec Co vs. Zhonghong Pulin Medical
Performance |
Timeline |
Dongxing Sec |
Zhonghong Pulin Medical |
Dongxing Sec and Zhonghong Pulin Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dongxing Sec and Zhonghong Pulin
The main advantage of trading using opposite Dongxing Sec and Zhonghong Pulin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongxing Sec position performs unexpectedly, Zhonghong Pulin 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 Zhonghong Pulin will offset losses from the drop in Zhonghong Pulin's long position.Dongxing Sec vs. Shantou Wanshun Package | Dongxing Sec vs. Jiahe Foods Industry | Dongxing Sec vs. Shenyang Huitian Thermal | Dongxing Sec vs. Hefei Metalforming Mach |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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