Correlation Between Dawushan Farm and Data International

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Can any of the company-specific risk be diversified away by investing in both Dawushan Farm and Data International 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 Dawushan Farm and Data International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dawushan Farm Tech and Data International Co, you can compare the effects of market volatilities on Dawushan Farm and Data 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 Dawushan Farm with a short position of Data International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dawushan Farm and Data International.

Diversification Opportunities for Dawushan Farm and Data International

-0.5
  Correlation Coefficient

Very good diversification

The 3 months correlation between Dawushan and Data is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dawushan Farm Tech and Data International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data International and Dawushan Farm 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 Dawushan Farm Tech are associated (or correlated) with Data International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data International has no effect on the direction of Dawushan Farm i.e., Dawushan Farm and Data International go up and down completely randomly.

Pair Corralation between Dawushan Farm and Data International

Assuming the 90 days trading horizon Dawushan Farm Tech is expected to generate 0.16 times more return on investment than Data International. However, Dawushan Farm Tech is 6.18 times less risky than Data International. It trades about 0.1 of its potential returns per unit of risk. Data International Co is currently generating about -0.1 per unit of risk. If you would invest  4,920  in Dawushan Farm Tech on October 29, 2024 and sell it today you would earn a total of  70.00  from holding Dawushan Farm Tech or generate 1.42% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Dawushan Farm Tech  vs.  Data International Co

 Performance 
       Timeline  
Dawushan Farm Tech 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Dawushan Farm Tech are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Dawushan Farm may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Data International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Data International Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Dawushan Farm and Data International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dawushan Farm and Data International

The main advantage of trading using opposite Dawushan Farm and Data International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dawushan Farm position performs unexpectedly, Data 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 Data International will offset losses from the drop in Data International's long position.
The idea behind Dawushan Farm Tech and Data International Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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