Correlation Between Datadog and Hua Hong
Can any of the company-specific risk be diversified away by investing in both Datadog and Hua Hong 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 Datadog and Hua Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Datadog and Hua Hong Semiconductor, you can compare the effects of market volatilities on Datadog and Hua Hong 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 Datadog with a short position of Hua Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datadog and Hua Hong.
Diversification Opportunities for Datadog and Hua Hong
Very good diversification
The 3 months correlation between Datadog and Hua is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Datadog and Hua Hong Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hua Hong Semiconductor and Datadog 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 Datadog are associated (or correlated) with Hua Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hua Hong Semiconductor has no effect on the direction of Datadog i.e., Datadog and Hua Hong go up and down completely randomly.
Pair Corralation between Datadog and Hua Hong
Assuming the 90 days horizon Datadog is expected to under-perform the Hua Hong. But the stock apears to be less risky and, when comparing its historical volatility, Datadog is 1.32 times less risky than Hua Hong. The stock trades about -0.08 of its potential returns per unit of risk. The Hua Hong Semiconductor is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 246.00 in Hua Hong Semiconductor on October 30, 2024 and sell it today you would earn a total of 48.00 from holding Hua Hong Semiconductor or generate 19.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Datadog vs. Hua Hong Semiconductor
Performance |
| Timeline |
| Datadog |
| Hua Hong Semiconductor |
Datadog and Hua Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datadog and Hua Hong
The main advantage of trading using opposite Datadog and Hua Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datadog position performs unexpectedly, Hua Hong 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 Hua Hong will offset losses from the drop in Hua Hong's long position.| Datadog vs. UNITED UTILITIES GR | Datadog vs. MagnaChip Semiconductor Corp | Datadog vs. Algonquin Power Utilities | Datadog vs. Hua Hong Semiconductor |
| Hua Hong vs. Perseus Mining Limited | Hua Hong vs. Stag Industrial | Hua Hong vs. Compagnie Plastic Omnium | Hua Hong vs. Heidelberg Materials AG |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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