Correlation Between China Datang and PLAY2CHILL
Can any of the company-specific risk be diversified away by investing in both China Datang and PLAY2CHILL 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 China Datang and PLAY2CHILL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Datang and PLAY2CHILL SA ZY, you can compare the effects of market volatilities on China Datang and PLAY2CHILL 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 China Datang with a short position of PLAY2CHILL. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Datang and PLAY2CHILL.
Diversification Opportunities for China Datang and PLAY2CHILL
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and PLAY2CHILL is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding China Datang and PLAY2CHILL SA ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAY2CHILL SA ZY and China Datang 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 China Datang are associated (or correlated) with PLAY2CHILL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAY2CHILL SA ZY has no effect on the direction of China Datang i.e., China Datang and PLAY2CHILL go up and down completely randomly.
Pair Corralation between China Datang and PLAY2CHILL
Assuming the 90 days horizon China Datang is expected to generate 1.62 times more return on investment than PLAY2CHILL. However, China Datang is 1.62 times more volatile than PLAY2CHILL SA ZY. It trades about 0.1 of its potential returns per unit of risk. PLAY2CHILL SA ZY is currently generating about -0.03 per unit of risk. If you would invest 24.00 in China Datang on October 26, 2024 and sell it today you would earn a total of 1.00 from holding China Datang or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Datang vs. PLAY2CHILL SA ZY
Performance |
| Timeline |
| China Datang |
| PLAY2CHILL SA ZY |
China Datang and PLAY2CHILL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Datang and PLAY2CHILL
The main advantage of trading using opposite China Datang and PLAY2CHILL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Datang position performs unexpectedly, PLAY2CHILL 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 PLAY2CHILL will offset losses from the drop in PLAY2CHILL's long position.| China Datang vs. NextEra Energy | China Datang vs. The Southern | China Datang vs. VERBUND AG | China Datang vs. PGE Corporation |
| PLAY2CHILL vs. NEXON Co | PLAY2CHILL vs. NEXON Co | PLAY2CHILL vs. Take Two Interactive Software | PLAY2CHILL vs. Aristocrat Leisure Limited |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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