Correlation Between Datang International and Power Assets
Can any of the company-specific risk be diversified away by investing in both Datang International and Power Assets 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 International and Power Assets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Datang International Power and Power Assets Holdings, you can compare the effects of market volatilities on Datang International and Power Assets 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 International with a short position of Power Assets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang International and Power Assets.
Diversification Opportunities for Datang International and Power Assets
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Datang and Power is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Datang International Power and Power Assets Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Assets Holdings and Datang International 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 International Power are associated (or correlated) with Power Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Assets Holdings has no effect on the direction of Datang International i.e., Datang International and Power Assets go up and down completely randomly.
Pair Corralation between Datang International and Power Assets
If you would invest 21.00 in Datang International Power on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Datang International Power or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Datang International Power vs. Power Assets Holdings
Performance |
| Timeline |
| Datang International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Power Assets Holdings |
Datang International and Power Assets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datang International and Power Assets
The main advantage of trading using opposite Datang International and Power Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang International position performs unexpectedly, Power Assets 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 Power Assets will offset losses from the drop in Power Assets' long position.| Datang International vs. Maxim Power Corp | Datang International vs. Pampa Energia SA | Datang International vs. NRG Energy | Datang International vs. Vistra Energy Corp |
| Power Assets vs. TransAlta Corp | Power Assets vs. Pampa Energia SA | Power Assets vs. Vistra Energy Corp | Power Assets vs. NRG Energy |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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