Correlation Between DATANG INTL and Amcor Plc
Can any of the company-specific risk be diversified away by investing in both DATANG INTL and Amcor Plc 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 Amcor Plc 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 Amcor plc, you can compare the effects of market volatilities on DATANG INTL and Amcor Plc 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 Amcor Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of DATANG INTL and Amcor Plc.
Diversification Opportunities for DATANG INTL and Amcor Plc
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between DATANG and Amcor is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding DATANG INTL POW and Amcor plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcor plc 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 Amcor Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcor plc has no effect on the direction of DATANG INTL i.e., DATANG INTL and Amcor Plc go up and down completely randomly.
Pair Corralation between DATANG INTL and Amcor Plc
Assuming the 90 days trading horizon DATANG INTL is expected to generate 1.17 times less return on investment than Amcor Plc. In addition to that, DATANG INTL is 1.43 times more volatile than Amcor plc. It trades about 0.02 of its total potential returns per unit of risk. Amcor plc is currently generating about 0.03 per unit of volatility. If you would invest 922.00 in Amcor plc on September 14, 2024 and sell it today you would earn a total of 9.00 from holding Amcor plc or generate 0.98% 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. Amcor plc
Performance |
| Timeline |
| DATANG INTL POW |
| Amcor plc |
DATANG INTL and Amcor Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DATANG INTL and Amcor Plc
The main advantage of trading using opposite DATANG INTL and Amcor Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DATANG INTL position performs unexpectedly, Amcor Plc 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 Amcor Plc will offset losses from the drop in Amcor Plc's long position.| DATANG INTL vs. Apple Inc | DATANG INTL vs. Apple Inc | DATANG INTL vs. Apple Inc | DATANG INTL vs. Apple Inc |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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