Correlation Between Datang International and ÖKOWORLD
Can any of the company-specific risk be diversified away by investing in both Datang International and ÖKOWORLD 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 ÖKOWORLD 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 KOWORLD AG, you can compare the effects of market volatilities on Datang International and ÖKOWORLD 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 ÖKOWORLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang International and ÖKOWORLD.
Diversification Opportunities for Datang International and ÖKOWORLD
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Datang and ÖKOWORLD is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Datang International Power and KOWORLD AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOWORLD AG 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 ÖKOWORLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOWORLD AG has no effect on the direction of Datang International i.e., Datang International and ÖKOWORLD go up and down completely randomly.
Pair Corralation between Datang International and ÖKOWORLD
Assuming the 90 days horizon Datang International Power is expected to generate 1.55 times more return on investment than ÖKOWORLD. However, Datang International is 1.55 times more volatile than KOWORLD AG. It trades about 0.05 of its potential returns per unit of risk. KOWORLD AG is currently generating about -0.01 per unit of risk. If you would invest 10.00 in Datang International Power on October 9, 2024 and sell it today you would earn a total of 7.00 from holding Datang International Power or generate 70.0% 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. KOWORLD AG
Performance |
| Timeline |
| Datang International |
| KOWORLD AG |
Datang International and ÖKOWORLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datang International and ÖKOWORLD
The main advantage of trading using opposite Datang International and ÖKOWORLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang International position performs unexpectedly, ÖKOWORLD 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 ÖKOWORLD will offset losses from the drop in ÖKOWORLD's long position.| Datang International vs. Superior Plus Corp | Datang International vs. NMI Holdings | Datang International vs. SIVERS SEMICONDUCTORS AB | Datang International vs. Talanx AG |
| ÖKOWORLD vs. Wenzhou Kangning Hospital | ÖKOWORLD vs. Siemens Healthineers AG | ÖKOWORLD vs. RYMAN HEALTHCAR | ÖKOWORLD vs. Transport International Holdings |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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