Correlation Between Datang HuaYin and YiDong Electronics
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By analyzing existing cross correlation between Datang HuaYin Electric and YiDong Electronics Technology, you can compare the effects of market volatilities on Datang HuaYin and YiDong Electronics 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 Datang HuaYin with a short position of YiDong Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang HuaYin and YiDong Electronics.
Diversification Opportunities for Datang HuaYin and YiDong Electronics
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Datang and YiDong is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Datang HuaYin Electric and YiDong Electronics Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YiDong Electronics and Datang HuaYin 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 Datang HuaYin Electric are associated (or correlated) with YiDong Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YiDong Electronics has no effect on the direction of Datang HuaYin i.e., Datang HuaYin and YiDong Electronics go up and down completely randomly.
Pair Corralation between Datang HuaYin and YiDong Electronics
Assuming the 90 days trading horizon Datang HuaYin is expected to generate 1.45 times less return on investment than YiDong Electronics. But when comparing it to its historical volatility, Datang HuaYin Electric is 1.47 times less risky than YiDong Electronics. It trades about 0.16 of its potential returns per unit of risk. YiDong Electronics Technology is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,459 in YiDong Electronics Technology on September 15, 2024 and sell it today you would earn a total of 598.00 from holding YiDong Electronics Technology or generate 40.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Datang HuaYin Electric vs. YiDong Electronics Technology
Performance |
Timeline |
Datang HuaYin Electric |
YiDong Electronics |
Datang HuaYin and YiDong Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Datang HuaYin and YiDong Electronics
The main advantage of trading using opposite Datang HuaYin and YiDong Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang HuaYin position performs unexpectedly, YiDong Electronics 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 YiDong Electronics will offset losses from the drop in YiDong Electronics' long position.Datang HuaYin vs. Industrial and Commercial | Datang HuaYin vs. China Construction Bank | Datang HuaYin vs. Agricultural Bank of | Datang HuaYin vs. Bank of China |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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