Correlation Between Datang International and 2G ENERGY
Can any of the company-specific risk be diversified away by investing in both Datang International and 2G ENERGY 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 Datang International and 2G ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Datang International Power and 2G ENERGY , you can compare the effects of market volatilities on Datang International and 2G ENERGY 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 International with a short position of 2G ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang International and 2G ENERGY.
Diversification Opportunities for Datang International and 2G ENERGY
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Datang and 2GB is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Datang International Power and 2G ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 2G ENERGY and Datang 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 Datang International Power are associated (or correlated) with 2G ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 2G ENERGY has no effect on the direction of Datang International i.e., Datang International and 2G ENERGY go up and down completely randomly.
Pair Corralation between Datang International and 2G ENERGY
Assuming the 90 days horizon Datang International Power is expected to under-perform the 2G ENERGY. In addition to that, Datang International is 1.03 times more volatile than 2G ENERGY . It trades about -0.08 of its total potential returns per unit of risk. 2G ENERGY is currently generating about 0.01 per unit of volatility. If you would invest 2,195 in 2G ENERGY on September 1, 2024 and sell it today you would earn a total of 0.00 from holding 2G ENERGY or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Datang International Power vs. 2G ENERGY
Performance |
| Timeline |
| Datang International |
| 2G ENERGY |
Datang International and 2G ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datang International and 2G ENERGY
The main advantage of trading using opposite Datang International and 2G ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang International position performs unexpectedly, 2G ENERGY 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 2G ENERGY will offset losses from the drop in 2G ENERGY's long position.| Datang International vs. CENTRICA ADR NEW | Datang International vs. TransAlta | Datang International vs. Superior Plus Corp | Datang International vs. NMI Holdings |
| 2G ENERGY vs. Australian Agricultural | 2G ENERGY vs. Ultra Clean Holdings | 2G ENERGY vs. Charter Communications | 2G ENERGY vs. Consolidated Communications Holdings |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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