Correlation Between DATANG INTL and Insulet
Can any of the company-specific risk be diversified away by investing in both DATANG INTL and Insulet 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 Insulet 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 Insulet, you can compare the effects of market volatilities on DATANG INTL and Insulet 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 Insulet. Check out your portfolio center. Please also check ongoing floating volatility patterns of DATANG INTL and Insulet.
Diversification Opportunities for DATANG INTL and Insulet
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DATANG and Insulet is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding DATANG INTL POW and Insulet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insulet 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 Insulet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insulet has no effect on the direction of DATANG INTL i.e., DATANG INTL and Insulet go up and down completely randomly.
Pair Corralation between DATANG INTL and Insulet
Assuming the 90 days trading horizon DATANG INTL POW is expected to generate 2.41 times more return on investment than Insulet. However, DATANG INTL is 2.41 times more volatile than Insulet. It trades about 0.09 of its potential returns per unit of risk. Insulet is currently generating about -0.06 per unit of risk. If you would invest 16.00 in DATANG INTL POW on September 25, 2024 and sell it today you would earn a total of 1.00 from holding DATANG INTL POW or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
DATANG INTL POW vs. Insulet
Performance |
| Timeline |
| DATANG INTL POW |
| Insulet |
DATANG INTL and Insulet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DATANG INTL and Insulet
The main advantage of trading using opposite DATANG INTL and Insulet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DATANG INTL position performs unexpectedly, Insulet 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 Insulet will offset losses from the drop in Insulet's long position.| DATANG INTL vs. Apple Inc | DATANG INTL vs. Apple Inc | DATANG INTL vs. Microsoft | DATANG INTL vs. Microsoft |
| Insulet vs. DATANG INTL POW | Insulet vs. Fidelity National Information | Insulet vs. MagnaChip Semiconductor Corp | Insulet vs. Datang International Power |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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