Correlation Between Dawushan Farm and Strong H
Can any of the company-specific risk be diversified away by investing in both Dawushan Farm and Strong H 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 Dawushan Farm and Strong H into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dawushan Farm Tech and Strong H Machinery, you can compare the effects of market volatilities on Dawushan Farm and Strong H 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 Dawushan Farm with a short position of Strong H. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dawushan Farm and Strong H.
Diversification Opportunities for Dawushan Farm and Strong H
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dawushan and Strong is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Dawushan Farm Tech and Strong H Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strong H Machinery and Dawushan Farm 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 Dawushan Farm Tech are associated (or correlated) with Strong H. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strong H Machinery has no effect on the direction of Dawushan Farm i.e., Dawushan Farm and Strong H go up and down completely randomly.
Pair Corralation between Dawushan Farm and Strong H
Assuming the 90 days trading horizon Dawushan Farm is expected to generate 1.02 times less return on investment than Strong H. In addition to that, Dawushan Farm is 1.77 times more volatile than Strong H Machinery. It trades about 0.02 of its total potential returns per unit of risk. Strong H Machinery is currently generating about 0.03 per unit of volatility. If you would invest 3,550 in Strong H Machinery on December 30, 2024 and sell it today you would earn a total of 50.00 from holding Strong H Machinery or generate 1.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Dawushan Farm Tech vs. Strong H Machinery
Performance |
Timeline |
Dawushan Farm Tech |
Strong H Machinery |
Dawushan Farm and Strong H Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dawushan Farm and Strong H
The main advantage of trading using opposite Dawushan Farm and Strong H positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dawushan Farm position performs unexpectedly, Strong H 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 Strong H will offset losses from the drop in Strong H's long position.Dawushan Farm vs. Li Kang Biomedical | Dawushan Farm vs. Dynamic Medical Technologies | Dawushan Farm vs. Medigen Biotechnology | Dawushan Farm vs. C Media Electronics |
Strong H vs. Globaltek Fabrication Co | Strong H vs. TBI Motion Technology | Strong H vs. Tong Tai Machine Tool | Strong H vs. Drewloong Precision |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |