Correlation Between Datang International and CANON MARKETING
Can any of the company-specific risk be diversified away by investing in both Datang International and CANON MARKETING 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 CANON MARKETING 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 CANON MARKETING JP, you can compare the effects of market volatilities on Datang International and CANON MARKETING 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 CANON MARKETING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang International and CANON MARKETING.
Diversification Opportunities for Datang International and CANON MARKETING
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Datang and CANON is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Datang International Power and CANON MARKETING JP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CANON MARKETING JP 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 CANON MARKETING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CANON MARKETING JP has no effect on the direction of Datang International i.e., Datang International and CANON MARKETING go up and down completely randomly.
Pair Corralation between Datang International and CANON MARKETING
Assuming the 90 days horizon Datang International Power is expected to under-perform the CANON MARKETING. In addition to that, Datang International is 2.81 times more volatile than CANON MARKETING JP. It trades about -0.08 of its total potential returns per unit of risk. CANON MARKETING JP is currently generating about 0.44 per unit of volatility. If you would invest 2,760 in CANON MARKETING JP on September 1, 2024 and sell it today you would earn a total of 280.00 from holding CANON MARKETING JP or generate 10.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Datang International Power vs. CANON MARKETING JP
Performance |
Timeline |
Datang International |
CANON MARKETING JP |
Datang International and CANON MARKETING Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Datang International and CANON MARKETING
The main advantage of trading using opposite Datang International and CANON MARKETING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang International position performs unexpectedly, CANON MARKETING 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 CANON MARKETING will offset losses from the drop in CANON MARKETING's long position.Datang International vs. TransAlta | Datang International vs. Superior Plus Corp | Datang International vs. NMI Holdings | Datang International vs. Origin Agritech |
CANON MARKETING vs. SIVERS SEMICONDUCTORS AB | CANON MARKETING vs. Darden Restaurants | CANON MARKETING vs. Reliance Steel Aluminum | CANON MARKETING vs. Q2M Managementberatung 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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