Correlation Between Pampa Energia and Datang International
Can any of the company-specific risk be diversified away by investing in both Pampa Energia 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 Pampa Energia and Datang International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pampa Energia SA and Datang International Power, you can compare the effects of market volatilities on Pampa Energia 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 Pampa Energia with a short position of Datang International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pampa Energia and Datang International.
Diversification Opportunities for Pampa Energia and Datang International
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pampa and Datang is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Pampa Energia SA and Datang International Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datang International and Pampa Energia 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 Pampa Energia SA 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 Pampa Energia i.e., Pampa Energia and Datang International go up and down completely randomly.
Pair Corralation between Pampa Energia and Datang International
If you would invest 6,656 in Pampa Energia SA on August 24, 2024 and sell it today you would earn a total of 1,572 from holding Pampa Energia SA or generate 23.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Pampa Energia SA vs. Datang International Power
Performance |
| Timeline |
| Pampa Energia SA |
| Datang International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Pampa Energia and Datang International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pampa Energia and Datang International
The main advantage of trading using opposite Pampa Energia and Datang International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pampa Energia 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.| Pampa Energia vs. Grupo Financiero Galicia | Pampa Energia vs. Banco Macro SA | Pampa Energia vs. Empresa Distribuidora y | Pampa Energia vs. Transportadora de Gas |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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