Correlation Between Datang International and DATAGROUP
Can any of the company-specific risk be diversified away by investing in both Datang International and DATAGROUP 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 DATAGROUP 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 DATAGROUP SE, you can compare the effects of market volatilities on Datang International and DATAGROUP 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 DATAGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang International and DATAGROUP.
Diversification Opportunities for Datang International and DATAGROUP
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Datang and DATAGROUP is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Datang International Power and DATAGROUP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATAGROUP SE 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 DATAGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATAGROUP SE has no effect on the direction of Datang International i.e., Datang International and DATAGROUP go up and down completely randomly.
Pair Corralation between Datang International and DATAGROUP
Assuming the 90 days horizon Datang International Power is expected to generate 1.63 times more return on investment than DATAGROUP. However, Datang International is 1.63 times more volatile than DATAGROUP SE. It trades about 0.06 of its potential returns per unit of risk. DATAGROUP SE is currently generating about -0.02 per unit of risk. If you would invest 12.00 in Datang International Power on September 14, 2024 and sell it today you would earn a total of 5.00 from holding Datang International Power or generate 41.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Datang International Power vs. DATAGROUP SE
Performance |
| Timeline |
| Datang International |
| DATAGROUP SE |
Datang International and DATAGROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datang International and DATAGROUP
The main advantage of trading using opposite Datang International and DATAGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang International position performs unexpectedly, DATAGROUP 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 DATAGROUP will offset losses from the drop in DATAGROUP's long position.| Datang International vs. Autohome ADR | Datang International vs. Neinor Homes SA | Datang International vs. Haier Smart Home | Datang International vs. bet at home AG |
| DATAGROUP vs. Compagnie Plastic Omnium | DATAGROUP vs. VIAPLAY GROUP AB | DATAGROUP vs. TRAVEL LEISURE DL 01 | DATAGROUP vs. PLAY2CHILL SA ZY |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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