Correlation Between Datang International and Industria
Can any of the company-specific risk be diversified away by investing in both Datang International and Industria 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 Industria 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 Industria de Diseno, you can compare the effects of market volatilities on Datang International and Industria 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 Industria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang International and Industria.
Diversification Opportunities for Datang International and Industria
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Datang and Industria is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Datang International Power and Industria de Diseno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industria de Diseno 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 Industria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industria de Diseno has no effect on the direction of Datang International i.e., Datang International and Industria go up and down completely randomly.
Pair Corralation between Datang International and Industria
Assuming the 90 days horizon Datang International Power is expected to generate 1.29 times more return on investment than Industria. However, Datang International is 1.29 times more volatile than Industria de Diseno. It trades about 0.01 of its potential returns per unit of risk. Industria de Diseno is currently generating about -0.05 per unit of risk. If you would invest 17.00 in Datang International Power on September 15, 2024 and sell it today you would earn a total of 0.00 from holding Datang International Power or generate 0.0% 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. Industria de Diseno
Performance |
| Timeline |
| Datang International |
| Industria de Diseno |
Datang International and Industria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datang International and Industria
The main advantage of trading using opposite Datang International and Industria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang International position performs unexpectedly, Industria 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 Industria will offset losses from the drop in Industria's long position.| Datang International vs. CN YANGTPWR GDR | Datang International vs. SIEMENS ENERGY AG | Datang International vs. Siemens Energy AG | Datang International vs. Vistra Corp |
| Industria vs. PUBLIC STORAGE PRFO | Industria vs. Datang International Power | Industria vs. CVS Health | Industria vs. Cass Information Systems |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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