Correlation Between GENTING SG and DATANG INTL
Can any of the company-specific risk be diversified away by investing in both GENTING SG and DATANG INTL 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 GENTING SG and DATANG INTL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GENTING SG LTD and DATANG INTL POW, you can compare the effects of market volatilities on GENTING SG and DATANG INTL 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 GENTING SG with a short position of DATANG INTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of GENTING SG and DATANG INTL.
Diversification Opportunities for GENTING SG and DATANG INTL
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GENTING and DATANG is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding GENTING SG LTD and DATANG INTL POW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATANG INTL POW and GENTING SG 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 GENTING SG LTD are associated (or correlated) with DATANG INTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATANG INTL POW has no effect on the direction of GENTING SG i.e., GENTING SG and DATANG INTL go up and down completely randomly.
Pair Corralation between GENTING SG and DATANG INTL
Assuming the 90 days horizon GENTING SG is expected to generate 17.57 times less return on investment than DATANG INTL. But when comparing it to its historical volatility, GENTING SG LTD is 1.64 times less risky than DATANG INTL. It trades about 0.0 of its potential returns per unit of risk. DATANG INTL POW is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 11.00 in DATANG INTL POW on October 7, 2024 and sell it today you would earn a total of 5.00 from holding DATANG INTL POW or generate 45.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GENTING SG LTD vs. DATANG INTL POW
Performance |
| Timeline |
| GENTING SG LTD |
| DATANG INTL POW |
GENTING SG and DATANG INTL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GENTING SG and DATANG INTL
The main advantage of trading using opposite GENTING SG and DATANG INTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GENTING SG position performs unexpectedly, DATANG INTL 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 DATANG INTL will offset losses from the drop in DATANG INTL's long position.| GENTING SG vs. FAST RETAIL ADR | GENTING SG vs. PICKN PAY STORES | GENTING SG vs. QURATE RETAIL INC | GENTING SG vs. Ross Stores |
| DATANG INTL vs. Apple Inc | DATANG INTL vs. Apple Inc | DATANG INTL vs. Apple Inc | DATANG INTL vs. Apple Inc |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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