Correlation Between Chindata Group and Gartner

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

By analyzing existing cross correlation between Chindata Group Holdings and Gartner, you can compare the effects of market volatilities on Chindata Group and Gartner 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 Chindata Group with a short position of Gartner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chindata Group and Gartner.

Diversification Opportunities for Chindata Group and Gartner

-0.54

Correlation Coefficient

Chindata Group  Gartner

Excellent diversification

The 3 months correlation between Chindata and Gartner is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Chindata Group Holdings and Gartner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gartner and Chindata Group 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 Chindata Group Holdings are associated (or correlated) with Gartner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gartner has no effect on the direction of Chindata Group i.e., Chindata Group and Gartner go up and down completely randomly.

Pair Corralation between Chindata Group and Gartner

Allowing for the 90-day total investment horizon Chindata Group Holdings is expected to under-perform the Gartner. In addition to that, Chindata Group is 2.33 times more volatile than Gartner. It trades about -0.01 of its total potential returns per unit of risk. Gartner is currently generating about 0.07 per unit of volatility. If you would invest  34,195  in Gartner on October 25, 2024 and sell it today you would earn a total of  18,287  from holding Gartner or generate 53.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	23.94%
Values	Daily Returns

Chindata Group Holdings  vs.  Gartner

Chindata Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chindata Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Chindata Group is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Gartner

Risk-Adjusted Performance

2 of 100

Weak

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

Pair Trading with Chindata Group and Gartner

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

The idea behind Chindata Group Holdings and Gartner 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.