Correlation Between CICT Mobile and Dongfeng Automobile
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By analyzing existing cross correlation between CICT Mobile Communication and Dongfeng Automobile Co, you can compare the effects of market volatilities on CICT Mobile and Dongfeng 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 CICT Mobile with a short position of Dongfeng Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of CICT Mobile and Dongfeng Automobile.
Diversification Opportunities for CICT Mobile and Dongfeng Automobile
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CICT and Dongfeng is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding CICT Mobile Communication and Dongfeng Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfeng Automobile and CICT Mobile 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 CICT Mobile Communication are associated (or correlated) with Dongfeng Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongfeng Automobile has no effect on the direction of CICT Mobile i.e., CICT Mobile and Dongfeng Automobile go up and down completely randomly.
Pair Corralation between CICT Mobile and Dongfeng Automobile
Assuming the 90 days trading horizon CICT Mobile is expected to generate 1.38 times less return on investment than Dongfeng Automobile. But when comparing it to its historical volatility, CICT Mobile Communication is 1.07 times less risky than Dongfeng Automobile. It trades about 0.07 of its potential returns per unit of risk. Dongfeng Automobile Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 622.00 in Dongfeng Automobile Co on September 26, 2024 and sell it today you would earn a total of 107.00 from holding Dongfeng Automobile Co or generate 17.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
CICT Mobile Communication vs. Dongfeng Automobile Co
Performance |
Timeline |
CICT Mobile Communication |
Dongfeng Automobile |
CICT Mobile and Dongfeng Automobile Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CICT Mobile and Dongfeng Automobile
The main advantage of trading using opposite CICT Mobile and Dongfeng Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CICT Mobile position performs unexpectedly, Dongfeng 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 Dongfeng Automobile will offset losses from the drop in Dongfeng Automobile's long position.CICT Mobile vs. Industrial and Commercial | CICT Mobile vs. Agricultural Bank of | CICT Mobile vs. China Construction Bank | CICT Mobile 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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