Correlation Between Data International and Chyang Sheng

Can any of the company-specific risk be diversified away by investing in both Data International and Chyang Sheng 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 Data International and Chyang Sheng into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Data International Co and Chyang Sheng Dyeing, you can compare the effects of market volatilities on Data International and Chyang Sheng 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 Data International with a short position of Chyang Sheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Data International and Chyang Sheng.

Diversification Opportunities for Data International and Chyang Sheng

-0.78

Correlation Coefficient

Data International  Chyang Sheng

Pay attention - limited upside

The 3 months correlation between Data and Chyang is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Data International Co and Chyang Sheng Dyeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chyang Sheng Dyeing and Data International 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 Data International Co are associated (or correlated) with Chyang Sheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chyang Sheng Dyeing has no effect on the direction of Data International i.e., Data International and Chyang Sheng go up and down completely randomly.

Pair Corralation between Data International and Chyang Sheng

Assuming the 90 days trading horizon Data International Co is expected to under-perform the Chyang Sheng. In addition to that, Data International is 1.88 times more volatile than Chyang Sheng Dyeing. It trades about -0.34 of its total potential returns per unit of risk. Chyang Sheng Dyeing is currently generating about 0.03 per unit of volatility. If you would invest  2,450  in Chyang Sheng Dyeing on September 16, 2024 and sell it today you would earn a total of  45.00  from holding Chyang Sheng Dyeing or generate 1.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Data International Co  vs.  Chyang Sheng Dyeing

Data International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Data International Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Chyang Sheng Dyeing

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Chyang Sheng Dyeing are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Chyang Sheng is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Data International and Chyang Sheng

The main advantage of trading using opposite Data International and Chyang Sheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Data International position performs unexpectedly, Chyang Sheng 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 Chyang Sheng will offset losses from the drop in Chyang Sheng's long position.

The idea behind Data International Co and Chyang Sheng Dyeing pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.