Correlation Between News and DATANG INTL
Can any of the company-specific risk be diversified away by investing in both News and DATANG INTL 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 News and DATANG INTL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between News Corporation and DATANG INTL POW, you can compare the effects of market volatilities on News and DATANG INTL 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 News with a short position of DATANG INTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of News and DATANG INTL.
Diversification Opportunities for News and DATANG INTL
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between News and DATANG is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding News Corp. and DATANG INTL POW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATANG INTL POW and News 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 News Corporation are associated (or correlated) with DATANG INTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATANG INTL POW has no effect on the direction of News i.e., News and DATANG INTL go up and down completely randomly.
Pair Corralation between News and DATANG INTL
Assuming the 90 days horizon News is expected to generate 8.27 times less return on investment than DATANG INTL. But when comparing it to its historical volatility, News Corporation is 3.29 times less risky than DATANG INTL. It trades about 0.04 of its potential returns per unit of risk. DATANG INTL POW is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 17.00 in DATANG INTL POW on September 13, 2024 and sell it today you would earn a total of 1.00 from holding DATANG INTL POW or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
News Corp. vs. DATANG INTL POW
Performance |
| Timeline |
| News |
| DATANG INTL POW |
News and DATANG INTL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with News and DATANG INTL
The main advantage of trading using opposite News and DATANG INTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if News position performs unexpectedly, DATANG INTL 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 INTL will offset losses from the drop in DATANG INTL's long position.| News vs. COPLAND ROAD CAPITAL | News vs. Jacquet Metal Service | News vs. LION ONE METALS | News vs. Transportadora de Gas |
| DATANG INTL vs. Apple Inc | DATANG INTL vs. Apple Inc | DATANG INTL vs. Apple Inc | DATANG INTL vs. Apple Inc |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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