Correlation Between INFORMATION SVC and DONGJIANG ENVIRONMENTAL
Can any of the company-specific risk be diversified away by investing in both INFORMATION SVC and DONGJIANG ENVIRONMENTAL 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 INFORMATION SVC and DONGJIANG ENVIRONMENTAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INFORMATION SVC GRP and DONGJIANG ENVIRONMENTAL H, you can compare the effects of market volatilities on INFORMATION SVC and DONGJIANG ENVIRONMENTAL 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 INFORMATION SVC with a short position of DONGJIANG ENVIRONMENTAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of INFORMATION SVC and DONGJIANG ENVIRONMENTAL.
Diversification Opportunities for INFORMATION SVC and DONGJIANG ENVIRONMENTAL
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between INFORMATION and DONGJIANG is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding INFORMATION SVC GRP and DONGJIANG ENVIRONMENTAL H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DONGJIANG ENVIRONMENTAL and INFORMATION SVC 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 INFORMATION SVC GRP are associated (or correlated) with DONGJIANG ENVIRONMENTAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DONGJIANG ENVIRONMENTAL has no effect on the direction of INFORMATION SVC i.e., INFORMATION SVC and DONGJIANG ENVIRONMENTAL go up and down completely randomly.
Pair Corralation between INFORMATION SVC and DONGJIANG ENVIRONMENTAL
Assuming the 90 days horizon INFORMATION SVC GRP is expected to generate 0.56 times more return on investment than DONGJIANG ENVIRONMENTAL. However, INFORMATION SVC GRP is 1.79 times less risky than DONGJIANG ENVIRONMENTAL. It trades about -0.5 of its potential returns per unit of risk. DONGJIANG ENVIRONMENTAL H is currently generating about -0.38 per unit of risk. If you would invest 346.00 in INFORMATION SVC GRP on October 17, 2024 and sell it today you would lose (44.00) from holding INFORMATION SVC GRP or give up 12.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INFORMATION SVC GRP vs. DONGJIANG ENVIRONMENTAL H
Performance |
| Timeline |
| INFORMATION SVC GRP |
| DONGJIANG ENVIRONMENTAL |
INFORMATION SVC and DONGJIANG ENVIRONMENTAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INFORMATION SVC and DONGJIANG ENVIRONMENTAL
The main advantage of trading using opposite INFORMATION SVC and DONGJIANG ENVIRONMENTAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INFORMATION SVC position performs unexpectedly, DONGJIANG ENVIRONMENTAL 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 DONGJIANG ENVIRONMENTAL will offset losses from the drop in DONGJIANG ENVIRONMENTAL's long position.| INFORMATION SVC vs. Air Transport Services | INFORMATION SVC vs. SEI INVESTMENTS | INFORMATION SVC vs. Japan Asia Investment | INFORMATION SVC vs. Fukuyama Transporting Co |
| DONGJIANG ENVIRONMENTAL vs. CN DATANG C | DONGJIANG ENVIRONMENTAL vs. INFORMATION SVC GRP | DONGJIANG ENVIRONMENTAL vs. SILVER BULLET DATA | DONGJIANG ENVIRONMENTAL vs. American Airlines Group |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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