Correlation Between China DatangRenewable and Corsair Gaming
Can any of the company-specific risk be diversified away by investing in both China DatangRenewable and Corsair Gaming 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 DatangRenewable and Corsair Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Datang and Corsair Gaming, you can compare the effects of market volatilities on China DatangRenewable and Corsair Gaming 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 DatangRenewable with a short position of Corsair Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of China DatangRenewable and Corsair Gaming.
Diversification Opportunities for China DatangRenewable and Corsair Gaming
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and Corsair is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding China Datang and Corsair Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corsair Gaming and China DatangRenewable 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 Corsair Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corsair Gaming has no effect on the direction of China DatangRenewable i.e., China DatangRenewable and Corsair Gaming go up and down completely randomly.
Pair Corralation between China DatangRenewable and Corsair Gaming
Assuming the 90 days horizon China Datang is expected to generate 0.57 times more return on investment than Corsair Gaming. However, China Datang is 1.77 times less risky than Corsair Gaming. It trades about 0.1 of its potential returns per unit of risk. Corsair Gaming is currently generating about -0.01 per unit of risk. If you would invest 23.00 in China Datang on October 10, 2024 and sell it today you would earn a total of 1.00 from holding China Datang or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Datang vs. Corsair Gaming
Performance |
| Timeline |
| China DatangRenewable |
| Corsair Gaming |
China DatangRenewable and Corsair Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China DatangRenewable and Corsair Gaming
The main advantage of trading using opposite China DatangRenewable and Corsair Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China DatangRenewable position performs unexpectedly, Corsair Gaming 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 Corsair Gaming will offset losses from the drop in Corsair Gaming's long position.| China DatangRenewable vs. NextEra Energy | China DatangRenewable vs. Xcel Energy | China DatangRenewable vs. Superior Plus Corp | China DatangRenewable vs. NMI Holdings |
| Corsair Gaming vs. United Natural Foods | Corsair Gaming vs. Tyson Foods | Corsair Gaming vs. Nomad Foods | Corsair Gaming vs. The Hanover Insurance |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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