Correlation Between Datang International and BANK CENTRAL
Can any of the company-specific risk be diversified away by investing in both Datang International and BANK CENTRAL 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 BANK CENTRAL 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 BANK CENTRAL ASIA, you can compare the effects of market volatilities on Datang International and BANK CENTRAL 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 BANK CENTRAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang International and BANK CENTRAL.
Diversification Opportunities for Datang International and BANK CENTRAL
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Datang and BANK is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Datang International Power and BANK CENTRAL ASIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK CENTRAL ASIA 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 BANK CENTRAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK CENTRAL ASIA has no effect on the direction of Datang International i.e., Datang International and BANK CENTRAL go up and down completely randomly.
Pair Corralation between Datang International and BANK CENTRAL
Assuming the 90 days horizon Datang International Power is expected to generate 3.37 times more return on investment than BANK CENTRAL. However, Datang International is 3.37 times more volatile than BANK CENTRAL ASIA. It trades about 0.05 of its potential returns per unit of risk. BANK CENTRAL ASIA is currently generating about 0.03 per unit of risk. If you would invest 10.00 in Datang International Power on October 13, 2024 and sell it today you would earn a total of 7.00 from holding Datang International Power or generate 70.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Datang International Power vs. BANK CENTRAL ASIA
Performance |
| Timeline |
| Datang International |
| BANK CENTRAL ASIA |
Datang International and BANK CENTRAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datang International and BANK CENTRAL
The main advantage of trading using opposite Datang International and BANK CENTRAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang International position performs unexpectedly, BANK CENTRAL 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 BANK CENTRAL will offset losses from the drop in BANK CENTRAL's long position.| Datang International vs. TITANIUM TRANSPORTGROUP | Datang International vs. BII Railway Transportation | Datang International vs. MAGNUM MINING EXP | Datang International vs. Forsys Metals Corp |
| BANK CENTRAL vs. MAGIC SOFTWARE ENTR | BANK CENTRAL vs. UNIDOC HEALTH P | BANK CENTRAL vs. AXWAY SOFTWARE EO | BANK CENTRAL vs. OPERA SOFTWARE |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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