Correlation Between Datang International and Peak Resources
Can any of the company-specific risk be diversified away by investing in both Datang International and Peak Resources 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 Peak Resources 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 Peak Resources Limited, you can compare the effects of market volatilities on Datang International and Peak Resources 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 Peak Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang International and Peak Resources.
Diversification Opportunities for Datang International and Peak Resources
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Datang and Peak is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Datang International Power and Peak Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peak Resources 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 Peak Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peak Resources has no effect on the direction of Datang International i.e., Datang International and Peak Resources go up and down completely randomly.
Pair Corralation between Datang International and Peak Resources
Assuming the 90 days horizon Datang International Power is expected to under-perform the Peak Resources. But the stock apears to be less risky and, when comparing its historical volatility, Datang International Power is 1.92 times less risky than Peak Resources. The stock trades about -0.17 of its potential returns per unit of risk. The Peak Resources Limited is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 5.90 in Peak Resources Limited on October 20, 2024 and sell it today you would earn a total of 0.85 from holding Peak Resources Limited or generate 14.41% 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. Peak Resources Limited
Performance |
| Timeline |
| Datang International |
| Peak Resources |
Datang International and Peak Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datang International and Peak Resources
The main advantage of trading using opposite Datang International and Peak Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang International position performs unexpectedly, Peak Resources 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 Peak Resources will offset losses from the drop in Peak Resources' long position.| Datang International vs. Infrastrutture Wireless Italiane | Datang International vs. Synovus Financial Corp | Datang International vs. United Insurance Holdings | Datang International vs. BJs Restaurants |
| Peak Resources vs. MOBILE FACTORY INC | Peak Resources vs. VULCAN MATERIALS | Peak Resources vs. EAGLE MATERIALS | Peak Resources vs. NEWELL RUBBERMAID |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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