Correlation Between DATANG INTL and Intel
Can any of the company-specific risk be diversified away by investing in both DATANG INTL and Intel 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 Intel 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 Intel, you can compare the effects of market volatilities on DATANG INTL and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of DATANG INTL and Intel.
Diversification Opportunities for DATANG INTL and Intel
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DATANG and Intel is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding DATANG INTL POW and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of DATANG INTL i.e., DATANG INTL and Intel go up and down completely randomly.
Pair Corralation between DATANG INTL and Intel
Assuming the 90 days trading horizon DATANG INTL POW is expected to generate 1.22 times more return on investment than Intel. However, DATANG INTL is 1.22 times more volatile than Intel. It trades about 0.03 of its potential returns per unit of risk. Intel is currently generating about -0.02 per unit of risk. If you would invest 14.00 in DATANG INTL POW on September 12, 2024 and sell it today you would earn a total of 3.00 from holding DATANG INTL POW or generate 21.43% 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. Intel
Performance |
| Timeline |
| DATANG INTL POW |
| Intel |
DATANG INTL and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DATANG INTL and Intel
The main advantage of trading using opposite DATANG INTL and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DATANG INTL position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.| DATANG INTL vs. Apple Inc | DATANG INTL vs. Apple Inc | DATANG INTL vs. Apple Inc | DATANG INTL vs. Apple Inc |
| Intel vs. Perdoceo Education | Intel vs. DATANG INTL POW | Intel vs. CHINA EDUCATION GROUP | Intel 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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