Correlation Between CN YANGTPWR and Datang International
Can any of the company-specific risk be diversified away by investing in both CN YANGTPWR and Datang International 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 CN YANGTPWR and Datang International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CN YANGTPWR GDR and Datang International Power, you can compare the effects of market volatilities on CN YANGTPWR and Datang International 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 CN YANGTPWR with a short position of Datang International. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN YANGTPWR and Datang International.
Diversification Opportunities for CN YANGTPWR and Datang International
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CYZB and Datang is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding CN YANGTPWR GDR and Datang International Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datang International and CN YANGTPWR 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 CN YANGTPWR GDR are associated (or correlated) with Datang International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datang International has no effect on the direction of CN YANGTPWR i.e., CN YANGTPWR and Datang International go up and down completely randomly.
Pair Corralation between CN YANGTPWR and Datang International
Assuming the 90 days trading horizon CN YANGTPWR GDR is expected to generate 0.39 times more return on investment than Datang International. However, CN YANGTPWR GDR is 2.57 times less risky than Datang International. It trades about 0.01 of its potential returns per unit of risk. Datang International Power is currently generating about -0.08 per unit of risk. If you would invest 3,320 in CN YANGTPWR GDR on September 1, 2024 and sell it today you would earn a total of 0.00 from holding CN YANGTPWR GDR or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CN YANGTPWR GDR vs. Datang International Power
Performance |
| Timeline |
| CN YANGTPWR GDR |
| Datang International |
CN YANGTPWR and Datang International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN YANGTPWR and Datang International
The main advantage of trading using opposite CN YANGTPWR and Datang International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN YANGTPWR position performs unexpectedly, Datang International 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 Datang International will offset losses from the drop in Datang International's long position.| CN YANGTPWR vs. Pick n Pay | CN YANGTPWR vs. Clean Energy Fuels | CN YANGTPWR vs. TFS FINANCIAL | CN YANGTPWR vs. QURATE RETAIL INC |
| Datang International vs. CENTRICA ADR NEW | Datang International vs. TransAlta | Datang International vs. Superior Plus Corp | Datang International vs. NMI Holdings |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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