Correlation Between GRENKELEASING Dusseldorf and DONGJIANG ENVIRONMENTAL

Can any of the company-specific risk be diversified away by investing in both GRENKELEASING Dusseldorf and DONGJIANG ENVIRONMENTAL 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 GRENKELEASING Dusseldorf and DONGJIANG ENVIRONMENTAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GRENKELEASING Dusseldorf and DONGJIANG ENVIRONMENTAL H, you can compare the effects of market volatilities on GRENKELEASING Dusseldorf and DONGJIANG ENVIRONMENTAL 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 GRENKELEASING Dusseldorf with a short position of DONGJIANG ENVIRONMENTAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRENKELEASING Dusseldorf and DONGJIANG ENVIRONMENTAL.

Diversification Opportunities for GRENKELEASING Dusseldorf and DONGJIANG ENVIRONMENTAL

-0.54

Correlation Coefficient

GRENKELEASING Dusseldorf  DONGJIANG ENVIRONMENTAL

Excellent diversification

The 3 months correlation between GRENKELEASING and DONGJIANG is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding GRENKELEASING Dusseldorf and DONGJIANG ENVIRONMENTAL H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DONGJIANG ENVIRONMENTAL and GRENKELEASING Dusseldorf 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 GRENKELEASING Dusseldorf are associated (or correlated) with DONGJIANG ENVIRONMENTAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DONGJIANG ENVIRONMENTAL has no effect on the direction of GRENKELEASING Dusseldorf i.e., GRENKELEASING Dusseldorf and DONGJIANG ENVIRONMENTAL go up and down completely randomly.

Pair Corralation between GRENKELEASING Dusseldorf and DONGJIANG ENVIRONMENTAL

Assuming the 90 days trading horizon GRENKELEASING Dusseldorf is expected to under-perform the DONGJIANG ENVIRONMENTAL. But the stock apears to be less risky and, when comparing its historical volatility, GRENKELEASING Dusseldorf is 2.89 times less risky than DONGJIANG ENVIRONMENTAL. The stock trades about -0.03 of its potential returns per unit of risk. The DONGJIANG ENVIRONMENTAL H is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  21.00  in DONGJIANG ENVIRONMENTAL H on December 25, 2024 and sell it today you would earn a total of  0.00  from holding DONGJIANG ENVIRONMENTAL H or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

GRENKELEASING Dusseldorf  vs.  DONGJIANG ENVIRONMENTAL H

GRENKELEASING Dusseldorf

Risk-Adjusted Performance

Very Weak

Over the last 90 days GRENKELEASING Dusseldorf has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking indicators, GRENKELEASING Dusseldorf is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

DONGJIANG ENVIRONMENTAL

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DONGJIANG ENVIRONMENTAL H are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, DONGJIANG ENVIRONMENTAL reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GRENKELEASING Dusseldorf and DONGJIANG ENVIRONMENTAL

The main advantage of trading using opposite GRENKELEASING Dusseldorf and DONGJIANG ENVIRONMENTAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRENKELEASING Dusseldorf position performs unexpectedly, DONGJIANG ENVIRONMENTAL 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 DONGJIANG ENVIRONMENTAL will offset losses from the drop in DONGJIANG ENVIRONMENTAL's long position.

The idea behind GRENKELEASING Dusseldorf and DONGJIANG ENVIRONMENTAL H pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.