Correlation Between Datang International and AGL Energy
Can any of the company-specific risk be diversified away by investing in both Datang International and AGL Energy 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 Datang International and AGL Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Datang International Power and AGL Energy, you can compare the effects of market volatilities on Datang International and AGL Energy 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 Datang International with a short position of AGL Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang International and AGL Energy.
Diversification Opportunities for Datang International and AGL Energy
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Datang and AGL is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Datang International Power and AGL Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGL Energy and Datang 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 Datang International Power are associated (or correlated) with AGL Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGL Energy has no effect on the direction of Datang International i.e., Datang International and AGL Energy go up and down completely randomly.
Pair Corralation between Datang International and AGL Energy
If you would invest 21.00 in Datang International Power on September 6, 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 |
Datang International Power vs. AGL Energy
Performance |
Timeline |
Datang International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
AGL Energy |
Datang International and AGL Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Datang International and AGL Energy
The main advantage of trading using opposite Datang International and AGL Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang International position performs unexpectedly, AGL Energy 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 AGL Energy will offset losses from the drop in AGL Energy's long position.Datang International vs. Maxim Power Corp | Datang International vs. Pampa Energia SA | Datang International vs. NRG Energy | Datang International vs. Vistra Energy Corp |
AGL Energy vs. NRG Energy | AGL Energy vs. TransAlta Corp | AGL Energy vs. Kenon Holdings | AGL Energy vs. Pampa Energia SA |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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