Correlation Between DATANG INTL and SWISS WATER
Can any of the company-specific risk be diversified away by investing in both DATANG INTL and SWISS WATER 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 SWISS WATER 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 SWISS WATER DECAFFCOFFEE, you can compare the effects of market volatilities on DATANG INTL and SWISS WATER 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 SWISS WATER. Check out your portfolio center. Please also check ongoing floating volatility patterns of DATANG INTL and SWISS WATER.
Diversification Opportunities for DATANG INTL and SWISS WATER
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DATANG and SWISS is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding DATANG INTL POW and SWISS WATER DECAFFCOFFEE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWISS WATER DECAFFCOFFEE 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 SWISS WATER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWISS WATER DECAFFCOFFEE has no effect on the direction of DATANG INTL i.e., DATANG INTL and SWISS WATER go up and down completely randomly.
Pair Corralation between DATANG INTL and SWISS WATER
Assuming the 90 days trading horizon DATANG INTL POW is expected to under-perform the SWISS WATER. In addition to that, DATANG INTL is 1.16 times more volatile than SWISS WATER DECAFFCOFFEE. It trades about -0.08 of its total potential returns per unit of risk. SWISS WATER DECAFFCOFFEE is currently generating about 0.15 per unit of volatility. If you would invest 252.00 in SWISS WATER DECAFFCOFFEE on September 2, 2024 and sell it today you would earn a total of 20.00 from holding SWISS WATER DECAFFCOFFEE or generate 7.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DATANG INTL POW vs. SWISS WATER DECAFFCOFFEE
Performance |
| Timeline |
| DATANG INTL POW |
| SWISS WATER DECAFFCOFFEE |
DATANG INTL and SWISS WATER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DATANG INTL and SWISS WATER
The main advantage of trading using opposite DATANG INTL and SWISS WATER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DATANG INTL position performs unexpectedly, SWISS WATER 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 SWISS WATER will offset losses from the drop in SWISS WATER's long position.| DATANG INTL vs. SIVERS SEMICONDUCTORS AB | DATANG INTL vs. Darden Restaurants | DATANG INTL vs. Reliance Steel Aluminum | DATANG INTL vs. Q2M Managementberatung AG |
| SWISS WATER vs. Molson Coors Beverage | SWISS WATER vs. Suntory Beverage Food | SWISS WATER vs. COSMOSTEEL HLDGS | SWISS WATER vs. Khiron Life Sciences |
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 CEOs Directory module to screen CEOs from public companies around the world.
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