Correlation Between Datang International and Pampa Energia
Can any of the company-specific risk be diversified away by investing in both Datang International and Pampa Energia 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 Pampa Energia 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 Pampa Energia SA, you can compare the effects of market volatilities on Datang International and Pampa Energia 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 Pampa Energia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang International and Pampa Energia.
Diversification Opportunities for Datang International and Pampa Energia
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Datang and Pampa is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Datang International Power and Pampa Energia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pampa Energia SA 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 Pampa Energia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pampa Energia SA has no effect on the direction of Datang International i.e., Datang International and Pampa Energia go up and down completely randomly.
Pair Corralation between Datang International and Pampa Energia
Assuming the 90 days horizon Datang International is expected to generate 1.21 times less return on investment than Pampa Energia. In addition to that, Datang International is 1.29 times more volatile than Pampa Energia SA. It trades about 0.07 of its total potential returns per unit of risk. Pampa Energia SA is currently generating about 0.1 per unit of volatility. If you would invest 2,611 in Pampa Energia SA on September 6, 2024 and sell it today you would earn a total of 5,995 from holding Pampa Energia SA or generate 229.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 38.79% |
Values | Daily Returns |
Datang International Power vs. Pampa Energia SA
Performance |
Timeline |
Datang International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Pampa Energia SA |
Datang International and Pampa Energia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Datang International and Pampa Energia
The main advantage of trading using opposite Datang International and Pampa Energia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang International position performs unexpectedly, Pampa Energia 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 Pampa Energia will offset losses from the drop in Pampa Energia'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 |
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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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