Correlation Between Data International and China Steel
Can any of the company-specific risk be diversified away by investing in both Data International and China Steel 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 China Steel 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 China Steel Corp, you can compare the effects of market volatilities on Data International and China Steel 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 China Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Data International and China Steel.
Diversification Opportunities for Data International and China Steel
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Data and China is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Data International Co and China Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Steel Corp 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 China Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Steel Corp has no effect on the direction of Data International i.e., Data International and China Steel go up and down completely randomly.
Pair Corralation between Data International and China Steel
Assuming the 90 days trading horizon Data International Co is expected to generate 16.58 times more return on investment than China Steel. However, Data International is 16.58 times more volatile than China Steel Corp. It trades about -0.01 of its potential returns per unit of risk. China Steel Corp is currently generating about -0.2 per unit of risk. If you would invest 13,850 in Data International Co on December 29, 2024 and sell it today you would lose (750.00) from holding Data International Co or give up 5.42% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Data International Co vs. China Steel Corp
Performance |
Timeline |
Data International |
China Steel Corp |
Data International and China Steel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Data International and China Steel
The main advantage of trading using opposite Data International and China Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Data International position performs unexpectedly, China Steel 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 China Steel will offset losses from the drop in China Steel's long position.Data International vs. China Metal Products | Data International vs. Wei Chih Steel | Data International vs. Prime Oil Chemical | Data International vs. Jinan Acetate Chemical |
China Steel vs. Union Insurance Co | China Steel vs. Shan Loong Transportation Co | China Steel vs. Sunmax Biotechnology Co | China Steel vs. Compal Broadband Networks |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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