Correlation Between THORNEY TECHS and CN DATANG
Can any of the company-specific risk be diversified away by investing in both THORNEY TECHS and CN DATANG 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 THORNEY TECHS and CN DATANG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THORNEY TECHS LTD and CN DATANG C, you can compare the effects of market volatilities on THORNEY TECHS and CN DATANG 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 THORNEY TECHS with a short position of CN DATANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of THORNEY TECHS and CN DATANG.
Diversification Opportunities for THORNEY TECHS and CN DATANG
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between THORNEY and DT7 is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding THORNEY TECHS LTD and CN DATANG C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN DATANG C and THORNEY TECHS 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 THORNEY TECHS LTD are associated (or correlated) with CN DATANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN DATANG C has no effect on the direction of THORNEY TECHS i.e., THORNEY TECHS and CN DATANG go up and down completely randomly.
Pair Corralation between THORNEY TECHS and CN DATANG
Assuming the 90 days horizon THORNEY TECHS LTD is expected to under-perform the CN DATANG. In addition to that, THORNEY TECHS is 2.68 times more volatile than CN DATANG C. It trades about -0.02 of its total potential returns per unit of risk. CN DATANG C is currently generating about 0.01 per unit of volatility. If you would invest 24.00 in CN DATANG C on October 12, 2024 and sell it today you would earn a total of 0.00 from holding CN DATANG C or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
THORNEY TECHS LTD vs. CN DATANG C
Performance |
| Timeline |
| THORNEY TECHS LTD |
| CN DATANG C |
THORNEY TECHS and CN DATANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THORNEY TECHS and CN DATANG
The main advantage of trading using opposite THORNEY TECHS and CN DATANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THORNEY TECHS position performs unexpectedly, CN DATANG 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 CN DATANG will offset losses from the drop in CN DATANG's long position.| THORNEY TECHS vs. ARDAGH METAL PACDL 0001 | THORNEY TECHS vs. Teradata Corp | THORNEY TECHS vs. Automatic Data Processing | THORNEY TECHS vs. Northern Data AG |
| CN DATANG vs. VELA TECHNOLPLC LS 0001 | CN DATANG vs. CITY OFFICE REIT | CN DATANG vs. THORNEY TECHS LTD | CN DATANG vs. KENEDIX OFFICE INV |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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