Correlation Between DATANG INTL and ROBERTET
Can any of the company-specific risk be diversified away by investing in both DATANG INTL and ROBERTET 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 INTL and ROBERTET into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DATANG INTL POW and ROBERTET SA INH, you can compare the effects of market volatilities on DATANG INTL and ROBERTET 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 INTL with a short position of ROBERTET. Check out your portfolio center. Please also check ongoing floating volatility patterns of DATANG INTL and ROBERTET.
Diversification Opportunities for DATANG INTL and ROBERTET
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between DATANG and ROBERTET is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding DATANG INTL POW and ROBERTET SA INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROBERTET SA INH and DATANG INTL 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 INTL POW are associated (or correlated) with ROBERTET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROBERTET SA INH has no effect on the direction of DATANG INTL i.e., DATANG INTL and ROBERTET go up and down completely randomly.
Pair Corralation between DATANG INTL and ROBERTET
Assuming the 90 days trading horizon DATANG INTL POW is expected to generate 2.98 times more return on investment than ROBERTET. However, DATANG INTL is 2.98 times more volatile than ROBERTET SA INH. It trades about 0.04 of its potential returns per unit of risk. ROBERTET SA INH is currently generating about 0.01 per unit of risk. If you would invest 11.00 in DATANG INTL POW on September 23, 2024 and sell it today you would earn a total of 7.00 from holding DATANG INTL POW or generate 63.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DATANG INTL POW vs. ROBERTET SA INH
Performance |
| Timeline |
| DATANG INTL POW |
| ROBERTET SA INH |
DATANG INTL and ROBERTET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DATANG INTL and ROBERTET
The main advantage of trading using opposite DATANG INTL and ROBERTET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DATANG INTL position performs unexpectedly, ROBERTET 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 ROBERTET will offset losses from the drop in ROBERTET's long position.| DATANG INTL vs. Apple Inc | DATANG INTL vs. Apple Inc | DATANG INTL vs. Apple Inc | DATANG INTL vs. Apple Inc |
| ROBERTET vs. DATANG INTL POW | ROBERTET vs. PT Indofood Sukses | ROBERTET vs. Cass Information Systems | ROBERTET vs. Lery Seafood 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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