Correlation Between Datang International and CNOOC
Can any of the company-specific risk be diversified away by investing in both Datang International and CNOOC 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 CNOOC 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 CNOOC, you can compare the effects of market volatilities on Datang International and CNOOC 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 CNOOC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang International and CNOOC.
Diversification Opportunities for Datang International and CNOOC
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Datang and CNOOC is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Datang International Power and CNOOC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNOOC 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 CNOOC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNOOC has no effect on the direction of Datang International i.e., Datang International and CNOOC go up and down completely randomly.
Pair Corralation between Datang International and CNOOC
If you would invest 17.00 in Datang International Power on September 13, 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 | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Datang International Power vs. CNOOC
Performance |
| Timeline |
| Datang International |
| CNOOC |
Datang International and CNOOC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datang International and CNOOC
The main advantage of trading using opposite Datang International and CNOOC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang International position performs unexpectedly, CNOOC 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 CNOOC will offset losses from the drop in CNOOC's long position.| Datang International vs. Fevertree Drinks PLC | Datang International vs. MOLSON RS BEVERAGE | Datang International vs. ScanSource | Datang International vs. SCANSOURCE |
| CNOOC vs. Ribbon Communications | CNOOC vs. LG Display Co | CNOOC vs. WillScot Mobile Mini | CNOOC vs. Hollywood Bowl Group |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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