Correlation Between Maxim Power and Datang International
Can any of the company-specific risk be diversified away by investing in both Maxim Power and Datang International 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 Maxim Power and Datang International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maxim Power Corp and Datang International Power, you can compare the effects of market volatilities on Maxim Power and Datang International 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 Maxim Power with a short position of Datang International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maxim Power and Datang International.
Diversification Opportunities for Maxim Power and Datang International
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Maxim and Datang is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Maxim Power Corp and Datang International Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datang International and Maxim Power 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 Maxim Power Corp are associated (or correlated) with Datang International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datang International has no effect on the direction of Maxim Power i.e., Maxim Power and Datang International go up and down completely randomly.
Pair Corralation between Maxim Power and Datang International
If you would invest 296.00 in Maxim Power Corp on August 28, 2024 and sell it today you would earn a total of 54.00 from holding Maxim Power Corp or generate 18.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Maxim Power Corp vs. Datang International Power
Performance |
| Timeline |
| Maxim Power Corp |
| Datang International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Maxim Power and Datang International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maxim Power and Datang International
The main advantage of trading using opposite Maxim Power and Datang International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maxim Power position performs unexpectedly, Datang International 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 Datang International will offset losses from the drop in Datang International's long position.The idea behind Maxim Power Corp and Datang International Power pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Datang International vs. Maxim Power Corp | Datang International vs. Pampa Energia SA | Datang International vs. NRG Energy | Datang International vs. Vistra Energy Corp |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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