Correlation Between AGL Energy and Datang International
Can any of the company-specific risk be diversified away by investing in both AGL Energy and Datang International 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 AGL Energy and Datang International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGL Energy and Datang International Power, you can compare the effects of market volatilities on AGL Energy and Datang International 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 AGL Energy with a short position of Datang International. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGL Energy and Datang International.
Diversification Opportunities for AGL Energy and Datang International
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AGL and Datang is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding AGL Energy and Datang International Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datang International and AGL Energy 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 AGL Energy are associated (or correlated) with Datang International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datang International has no effect on the direction of AGL Energy i.e., AGL Energy and Datang International go up and down completely randomly.
Pair Corralation between AGL Energy and Datang International
If you would invest 21.00 in Datang International Power on September 11, 2024 and sell it today you would earn a total of 0.00 from holding Datang International Power or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 1.59% |
Values | Daily Returns |
AGL Energy vs. Datang International Power
Performance |
Timeline |
AGL Energy |
Datang International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
AGL Energy and Datang International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AGL Energy and Datang International
The main advantage of trading using opposite AGL Energy and Datang International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGL Energy position performs unexpectedly, Datang International 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 Datang International will offset losses from the drop in Datang International's long position.AGL Energy vs. NRG Energy | AGL Energy vs. TransAlta Corp | AGL Energy vs. Kenon Holdings | AGL Energy vs. Pampa Energia SA |
Datang International vs. Maxim Power Corp | Datang International vs. Pampa Energia SA | Datang International vs. NRG Energy | Datang International vs. Vistra Energy Corp |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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