Correlation Between Data International and Zeng Hsing
Can any of the company-specific risk be diversified away by investing in both Data International and Zeng Hsing 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 Data International and Zeng Hsing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Data International Co and Zeng Hsing Industrial, you can compare the effects of market volatilities on Data International and Zeng Hsing 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 Data International with a short position of Zeng Hsing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Data International and Zeng Hsing.
Diversification Opportunities for Data International and Zeng Hsing
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Data and Zeng is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Data International Co and Zeng Hsing Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zeng Hsing Industrial and Data International 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 Data International Co are associated (or correlated) with Zeng Hsing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zeng Hsing Industrial has no effect on the direction of Data International i.e., Data International and Zeng Hsing go up and down completely randomly.
Pair Corralation between Data International and Zeng Hsing
Assuming the 90 days trading horizon Data International Co is expected to under-perform the Zeng Hsing. In addition to that, Data International is 3.04 times more volatile than Zeng Hsing Industrial. It trades about -0.04 of its total potential returns per unit of risk. Zeng Hsing Industrial is currently generating about 0.02 per unit of volatility. If you would invest 10,100 in Zeng Hsing Industrial on September 1, 2024 and sell it today you would earn a total of 250.00 from holding Zeng Hsing Industrial or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Data International Co vs. Zeng Hsing Industrial
Performance |
| Timeline |
| Data International |
| Zeng Hsing Industrial |
Data International and Zeng Hsing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Data International and Zeng Hsing
The main advantage of trading using opposite Data International and Zeng Hsing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Data International position performs unexpectedly, Zeng Hsing 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 Zeng Hsing will offset losses from the drop in Zeng Hsing's long position.| Data International vs. ReaLy Development Construction | Data International vs. Oceanic Beverages Co | Data International vs. Fulin Plastic Industry | Data International vs. Huang Hsiang Construction |
| Zeng Hsing vs. TTET Union Corp | Zeng Hsing vs. Shinkong Insurance Co | Zeng Hsing vs. Huaku Development Co | Zeng Hsing vs. China Steel Chemical |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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