Correlation Between Data International and China Times

Can any of the company-specific risk be diversified away by investing in both Data International and China Times 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 Times 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 Times Publishing, you can compare the effects of market volatilities on Data International and China Times 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 Times. Check out your portfolio center. Please also check ongoing floating volatility patterns of Data International and China Times.

Diversification Opportunities for Data International and China Times

0.14

Correlation Coefficient

Data International  China Times

Average diversification

The 3 months correlation between Data and China is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Data International Co and China Times Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Times Publishing 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 Times. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Times Publishing has no effect on the direction of Data International i.e., Data International and China Times go up and down completely randomly.

Pair Corralation between Data International and China Times

Assuming the 90 days trading horizon Data International Co is expected to under-perform the China Times. But the stock apears to be less risky and, when comparing its historical volatility, Data International Co is 1.57 times less risky than China Times. The stock trades about -0.33 of its potential returns per unit of risk. The China Times Publishing is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,855  in China Times Publishing on September 17, 2024 and sell it today you would earn a total of  135.00  from holding China Times Publishing or generate 7.28% return on investment over 90 days.

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

Data International Co  vs.  China Times Publishing

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.

China Times Publishing

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in China Times Publishing are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, China Times showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Data International and China Times

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

The idea behind Data International Co and China Times Publishing 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.