Correlation Between DATAGROUP and Datang International
Can any of the company-specific risk be diversified away by investing in both DATAGROUP 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 DATAGROUP and Datang International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DATAGROUP SE and Datang International Power, you can compare the effects of market volatilities on DATAGROUP 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 DATAGROUP with a short position of Datang International. Check out your portfolio center. Please also check ongoing floating volatility patterns of DATAGROUP and Datang International.
Diversification Opportunities for DATAGROUP and Datang International
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DATAGROUP and Datang is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding DATAGROUP SE and Datang International Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datang International and DATAGROUP 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 DATAGROUP SE 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 DATAGROUP i.e., DATAGROUP and Datang International go up and down completely randomly.
Pair Corralation between DATAGROUP and Datang International
Assuming the 90 days trading horizon DATAGROUP SE is expected to under-perform the Datang International. But the stock apears to be less risky and, when comparing its historical volatility, DATAGROUP SE is 1.63 times less risky than Datang International. The stock trades about -0.02 of its potential returns per unit of risk. The Datang International Power is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Datang International Power on September 14, 2024 and sell it today you would earn a total of 5.00 from holding Datang International Power or generate 41.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DATAGROUP SE vs. Datang International Power
Performance |
| Timeline |
| DATAGROUP SE |
| Datang International |
DATAGROUP and Datang International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DATAGROUP and Datang International
The main advantage of trading using opposite DATAGROUP and Datang International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DATAGROUP 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.| DATAGROUP vs. Compagnie Plastic Omnium | DATAGROUP vs. VIAPLAY GROUP AB | DATAGROUP vs. TRAVEL LEISURE DL 01 | DATAGROUP vs. PLAY2CHILL SA ZY |
| Datang International vs. Autohome ADR | Datang International vs. Neinor Homes SA | Datang International vs. Haier Smart Home | Datang International vs. bet at home AG |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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