Correlation Between Dawning Information and Sinomach Automobile
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By analyzing existing cross correlation between Dawning Information Industry and Sinomach Automobile Co, you can compare the effects of market volatilities on Dawning Information and Sinomach 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 Dawning Information with a short position of Sinomach Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dawning Information and Sinomach Automobile.
Diversification Opportunities for Dawning Information and Sinomach Automobile
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dawning and Sinomach is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Dawning Information Industry and Sinomach Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinomach Automobile and Dawning Information 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 Dawning Information Industry are associated (or correlated) with Sinomach Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinomach Automobile has no effect on the direction of Dawning Information i.e., Dawning Information and Sinomach Automobile go up and down completely randomly.
Pair Corralation between Dawning Information and Sinomach Automobile
Assuming the 90 days trading horizon Dawning Information Industry is expected to generate 1.65 times more return on investment than Sinomach Automobile. However, Dawning Information is 1.65 times more volatile than Sinomach Automobile Co. It trades about 0.34 of its potential returns per unit of risk. Sinomach Automobile Co is currently generating about 0.14 per unit of risk. If you would invest 3,432 in Dawning Information Industry on September 6, 2024 and sell it today you would earn a total of 4,368 from holding Dawning Information Industry or generate 127.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Dawning Information Industry vs. Sinomach Automobile Co
Performance |
Timeline |
Dawning Information |
Sinomach Automobile |
Dawning Information and Sinomach Automobile Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dawning Information and Sinomach Automobile
The main advantage of trading using opposite Dawning Information and Sinomach Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dawning Information position performs unexpectedly, Sinomach 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 Sinomach Automobile will offset losses from the drop in Sinomach Automobile's long position.Dawning Information vs. Xiangyu Medical Co | Dawning Information vs. Metro Investment Development | Dawning Information vs. Guangzhou Boji Medical | Dawning Information vs. Cowealth Medical China |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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