Correlation Between China DatangRenewable and Coor Service
Can any of the company-specific risk be diversified away by investing in both China DatangRenewable and Coor Service 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 Coor Service into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Datang and Coor Service Management, you can compare the effects of market volatilities on China DatangRenewable and Coor Service 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 Coor Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of China DatangRenewable and Coor Service.
Diversification Opportunities for China DatangRenewable and Coor Service
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Coor is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding China Datang and Coor Service Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coor Service Management 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 Coor Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coor Service Management has no effect on the direction of China DatangRenewable i.e., China DatangRenewable and Coor Service go up and down completely randomly.
Pair Corralation between China DatangRenewable and Coor Service
Assuming the 90 days horizon China Datang is expected to generate 0.69 times more return on investment than Coor Service. However, China Datang is 1.44 times less risky than Coor Service. It trades about 0.16 of its potential returns per unit of risk. Coor Service Management is currently generating about -0.15 per unit of risk. If you would invest 24.00 in China Datang on November 9, 2024 and sell it today you would earn a total of 2.00 from holding China Datang or generate 8.33% 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. Coor Service Management
Performance |
| Timeline |
| China DatangRenewable |
| Coor Service Management |
China DatangRenewable and Coor Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China DatangRenewable and Coor Service
The main advantage of trading using opposite China DatangRenewable and Coor Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China DatangRenewable position performs unexpectedly, Coor Service 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 Coor Service will offset losses from the drop in Coor Service's long position.| China DatangRenewable vs. Chunghwa Telecom Co | China DatangRenewable vs. New Residential Investment | China DatangRenewable vs. Japan Asia Investment | China DatangRenewable vs. Ribbon Communications |
| Coor Service vs. COMBA TELECOM SYST | Coor Service vs. CITIC Telecom International | Coor Service vs. Ultra Clean Holdings | Coor Service vs. Cairo Communication SpA |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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