Correlation Between GDS Holdings and Chindata Group
Can any of the company-specific risk be diversified away by investing in both GDS Holdings and Chindata Group 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 GDS Holdings and Chindata Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GDS Holdings and Chindata Group Holdings, you can compare the effects of market volatilities on GDS Holdings and Chindata Group 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 GDS Holdings with a short position of Chindata Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of GDS Holdings and Chindata Group.
Diversification Opportunities for GDS Holdings and Chindata Group
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GDS and Chindata is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding GDS Holdings and Chindata Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chindata Group Holdings and GDS Holdings 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 GDS Holdings are associated (or correlated) with Chindata Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chindata Group Holdings has no effect on the direction of GDS Holdings i.e., GDS Holdings and Chindata Group go up and down completely randomly.
Pair Corralation between GDS Holdings and Chindata Group
Considering the 90-day investment horizon GDS Holdings is expected to generate 1.46 times less return on investment than Chindata Group. In addition to that, GDS Holdings is 1.32 times more volatile than Chindata Group Holdings. It trades about 0.04 of its total potential returns per unit of risk. Chindata Group Holdings is currently generating about 0.08 per unit of volatility. If you would invest 645.00 in Chindata Group Holdings on November 1, 2024 and sell it today you would earn a total of 145.00 from holding Chindata Group Holdings or generate 22.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 19.62% |
| Values | Daily Returns |
GDS Holdings vs. Chindata Group Holdings
Performance |
| Timeline |
| GDS Holdings |
| Chindata Group Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GDS Holdings and Chindata Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GDS Holdings and Chindata Group
The main advantage of trading using opposite GDS Holdings and Chindata Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GDS Holdings position performs unexpectedly, Chindata Group 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 Chindata Group will offset losses from the drop in Chindata Group's long position.| GDS Holdings vs. ExlService Holdings | GDS Holdings vs. Gartner | GDS Holdings vs. VNET Group DRC | GDS Holdings vs. CLARIVATE PLC |
| Chindata Group vs. GDS Holdings | Chindata Group vs. ExlService Holdings | Chindata Group vs. Gartner | Chindata Group vs. VNET Group DRC |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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