Correlation Between MARKET VECTR and CN DATANG
Can any of the company-specific risk be diversified away by investing in both MARKET VECTR 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 MARKET VECTR and CN DATANG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MARKET VECTR RETAIL and CN DATANG C, you can compare the effects of market volatilities on MARKET VECTR 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 MARKET VECTR with a short position of CN DATANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of MARKET VECTR and CN DATANG.
Diversification Opportunities for MARKET VECTR and CN DATANG
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MARKET and DT7 is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding MARKET VECTR RETAIL 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 MARKET VECTR 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 MARKET VECTR RETAIL 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 MARKET VECTR i.e., MARKET VECTR and CN DATANG go up and down completely randomly.
Pair Corralation between MARKET VECTR and CN DATANG
Assuming the 90 days trading horizon MARKET VECTR is expected to generate 2.44 times less return on investment than CN DATANG. But when comparing it to its historical volatility, MARKET VECTR RETAIL is 5.27 times less risky than CN DATANG. It trades about 0.09 of its potential returns per unit of risk. CN DATANG C is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 14.00 in CN DATANG C on October 16, 2024 and sell it today you would earn a total of 9.00 from holding CN DATANG C or generate 64.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
MARKET VECTR RETAIL vs. CN DATANG C
Performance |
| Timeline |
| MARKET VECTR RETAIL |
| CN DATANG C |
MARKET VECTR and CN DATANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MARKET VECTR and CN DATANG
The main advantage of trading using opposite MARKET VECTR and CN DATANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MARKET VECTR 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.| MARKET VECTR vs. Acadia Healthcare | MARKET VECTR vs. Planet Fitness | MARKET VECTR vs. Cardinal Health | MARKET VECTR vs. CarsalesCom |
| CN DATANG vs. PICKN PAY STORES | CN DATANG vs. MARKET VECTR RETAIL | CN DATANG vs. ASPEN TECHINC DL | CN DATANG vs. Fast Retailing Co |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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