Correlation Between SWISS WATER and China Datang
Can any of the company-specific risk be diversified away by investing in both SWISS WATER and China Datang 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 SWISS WATER and China Datang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SWISS WATER DECAFFCOFFEE and China Datang, you can compare the effects of market volatilities on SWISS WATER and China Datang 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 SWISS WATER with a short position of China Datang. Check out your portfolio center. Please also check ongoing floating volatility patterns of SWISS WATER and China Datang.
Diversification Opportunities for SWISS WATER and China Datang
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SWISS and China is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding SWISS WATER DECAFFCOFFEE and China Datang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Datang and SWISS WATER 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 SWISS WATER DECAFFCOFFEE are associated (or correlated) with China Datang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Datang has no effect on the direction of SWISS WATER i.e., SWISS WATER and China Datang go up and down completely randomly.
Pair Corralation between SWISS WATER and China Datang
Assuming the 90 days horizon SWISS WATER DECAFFCOFFEE is expected to under-perform the China Datang. But the stock apears to be less risky and, when comparing its historical volatility, SWISS WATER DECAFFCOFFEE is 1.94 times less risky than China Datang. The stock trades about -0.12 of its potential returns per unit of risk. The China Datang is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 25.00 in China Datang on November 28, 2024 and sell it today you would earn a total of 0.00 from holding China Datang or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SWISS WATER DECAFFCOFFEE vs. China Datang
Performance |
| Timeline |
| SWISS WATER DECAFFCOFFEE |
| China Datang |
SWISS WATER and China Datang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SWISS WATER and China Datang
The main advantage of trading using opposite SWISS WATER and China Datang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SWISS WATER position performs unexpectedly, China Datang 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 China Datang will offset losses from the drop in China Datang's long position.| SWISS WATER vs. MOVIE GAMES SA | SWISS WATER vs. Mitsui Chemicals | SWISS WATER vs. QINGCI GAMES INC | SWISS WATER vs. OURGAME INTHOLDL 00005 |
| China Datang vs. GOLDQUEST MINING | China Datang vs. TRAVEL LEISURE DL 01 | China Datang vs. De Grey Mining | China Datang vs. Universal Display |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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