Correlation Between Datang International and REGAL ASIAN
Can any of the company-specific risk be diversified away by investing in both Datang International and REGAL ASIAN 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 REGAL ASIAN 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 REGAL ASIAN INVESTMENTS, you can compare the effects of market volatilities on Datang International and REGAL ASIAN 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 REGAL ASIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang International and REGAL ASIAN.
Diversification Opportunities for Datang International and REGAL ASIAN
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Datang and REGAL is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Datang International Power and REGAL ASIAN INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REGAL ASIAN INVESTMENTS 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 REGAL ASIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REGAL ASIAN INVESTMENTS has no effect on the direction of Datang International i.e., Datang International and REGAL ASIAN go up and down completely randomly.
Pair Corralation between Datang International and REGAL ASIAN
Assuming the 90 days horizon Datang International Power is expected to generate 2.21 times more return on investment than REGAL ASIAN. However, Datang International is 2.21 times more volatile than REGAL ASIAN INVESTMENTS. It trades about 0.1 of its potential returns per unit of risk. REGAL ASIAN INVESTMENTS is currently generating about -0.33 per unit of risk. If you would invest 17.00 in Datang International Power on September 20, 2024 and sell it today you would earn a total of 1.00 from holding Datang International Power or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Datang International Power vs. REGAL ASIAN INVESTMENTS
Performance |
| Timeline |
| Datang International |
| REGAL ASIAN INVESTMENTS |
Datang International and REGAL ASIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datang International and REGAL ASIAN
The main advantage of trading using opposite Datang International and REGAL ASIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang International position performs unexpectedly, REGAL ASIAN 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 REGAL ASIAN will offset losses from the drop in REGAL ASIAN's long position.| Datang International vs. THORNEY TECHS LTD | Datang International vs. AAC TECHNOLOGHLDGADR | Datang International vs. SIMS METAL MGT | Datang International vs. Playtech plc |
| REGAL ASIAN vs. ITALIAN WINE BRANDS | REGAL ASIAN vs. Hyrican Informationssysteme Aktiengesellschaft | REGAL ASIAN vs. Datang International Power | REGAL ASIAN vs. Heidelberg Materials AG |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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