Correlation Between Datang Telecom and Touchstone International
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By analyzing existing cross correlation between Datang Telecom Technology and Touchstone International Medical, you can compare the effects of market volatilities on Datang Telecom and Touchstone International 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 Telecom with a short position of Touchstone International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang Telecom and Touchstone International.
Diversification Opportunities for Datang Telecom and Touchstone International
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Datang and Touchstone is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Datang Telecom Technology and Touchstone International Medic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone International and Datang Telecom 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 Telecom Technology are associated (or correlated) with Touchstone International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone International has no effect on the direction of Datang Telecom i.e., Datang Telecom and Touchstone International go up and down completely randomly.
Pair Corralation between Datang Telecom and Touchstone International
Assuming the 90 days trading horizon Datang Telecom is expected to generate 1.45 times less return on investment than Touchstone International. In addition to that, Datang Telecom is 2.48 times more volatile than Touchstone International Medical. It trades about 0.01 of its total potential returns per unit of risk. Touchstone International Medical is currently generating about 0.04 per unit of volatility. If you would invest 1,814 in Touchstone International Medical on August 25, 2024 and sell it today you would earn a total of 32.00 from holding Touchstone International Medical or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Datang Telecom Technology vs. Touchstone International Medic
Performance |
| Timeline |
| Datang Telecom Technology |
| Touchstone International |
Datang Telecom and Touchstone International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datang Telecom and Touchstone International
The main advantage of trading using opposite Datang Telecom and Touchstone International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang Telecom position performs unexpectedly, Touchstone International 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 Touchstone International will offset losses from the drop in Touchstone International's long position.| Datang Telecom vs. Touchstone International Medical | Datang Telecom vs. Beijing Wandong Medical | Datang Telecom vs. China National Software | Datang Telecom vs. Winner Medical Co |
| Touchstone International vs. Bank of China | Touchstone International vs. Kweichow Moutai Co | Touchstone International vs. PetroChina Co Ltd | Touchstone International vs. Bank of Communications |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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