Correlation Between Dongxing Sec and Liaoning Dingjide
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By analyzing existing cross correlation between Dongxing Sec Co and Liaoning Dingjide Petrochemical, you can compare the effects of market volatilities on Dongxing Sec and Liaoning Dingjide 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 Liaoning Dingjide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongxing Sec and Liaoning Dingjide.
Diversification Opportunities for Dongxing Sec and Liaoning Dingjide
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dongxing and Liaoning is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Dongxing Sec Co and Liaoning Dingjide Petrochemica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Dingjide 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 Liaoning Dingjide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Dingjide has no effect on the direction of Dongxing Sec i.e., Dongxing Sec and Liaoning Dingjide go up and down completely randomly.
Pair Corralation between Dongxing Sec and Liaoning Dingjide
Assuming the 90 days trading horizon Dongxing Sec Co is expected to generate 0.92 times more return on investment than Liaoning Dingjide. However, Dongxing Sec Co is 1.08 times less risky than Liaoning Dingjide. It trades about 0.04 of its potential returns per unit of risk. Liaoning Dingjide Petrochemical is currently generating about 0.02 per unit of risk. If you would invest 1,035 in Dongxing Sec Co on October 25, 2024 and sell it today you would earn a total of 50.00 from holding Dongxing Sec Co or generate 4.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Dongxing Sec Co vs. Liaoning Dingjide Petrochemica
Performance |
Timeline |
Dongxing Sec |
Liaoning Dingjide |
Dongxing Sec and Liaoning Dingjide Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dongxing Sec and Liaoning Dingjide
The main advantage of trading using opposite Dongxing Sec and Liaoning Dingjide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongxing Sec position performs unexpectedly, Liaoning Dingjide 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 Liaoning Dingjide will offset losses from the drop in Liaoning Dingjide's long position.Dongxing Sec vs. Tianjin Hi Tech Development | Dongxing Sec vs. Strait Innovation Internet | Dongxing Sec vs. Linktel Technologies Co | Dongxing Sec vs. Tongyu Communication |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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