Correlation Between Datang International and TransAlta Corp
Can any of the company-specific risk be diversified away by investing in both Datang International and TransAlta Corp 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 TransAlta Corp 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 TransAlta Corp, you can compare the effects of market volatilities on Datang International and TransAlta Corp 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 TransAlta Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang International and TransAlta Corp.
Diversification Opportunities for Datang International and TransAlta Corp
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Datang and TransAlta is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Datang International Power and TransAlta Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransAlta Corp 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 TransAlta Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransAlta Corp has no effect on the direction of Datang International i.e., Datang International and TransAlta Corp go up and down completely randomly.
Pair Corralation between Datang International and TransAlta Corp
If you would invest 879.00 in TransAlta Corp on August 28, 2024 and sell it today you would earn a total of 200.00 from holding TransAlta Corp or generate 22.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.56% |
| Values | Daily Returns |
Datang International Power vs. TransAlta Corp
Performance |
| Timeline |
| Datang International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| TransAlta Corp |
Datang International and TransAlta Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datang International and TransAlta Corp
The main advantage of trading using opposite Datang International and TransAlta Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang International position performs unexpectedly, TransAlta Corp 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 TransAlta Corp will offset losses from the drop in TransAlta Corp's 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 |
| TransAlta Corp vs. Pampa Energia SA | TransAlta Corp vs. Vistra Energy Corp | TransAlta Corp vs. NRG Energy | TransAlta Corp vs. Power Assets 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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