Correlation Between CN DATANG and Strer SE

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

By analyzing existing cross correlation between CN DATANG C and Strer SE Co, you can compare the effects of market volatilities on CN DATANG and Strer SE 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 CN DATANG with a short position of Strer SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN DATANG and Strer SE.

Diversification Opportunities for CN DATANG and Strer SE

0.0

Correlation Coefficient

CN DATANG  Strer SE

Pay attention - limited upside

The 3 months correlation between DT7 and Strer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CN DATANG C and Strer SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strer SE and CN DATANG 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 CN DATANG C are associated (or correlated) with Strer SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strer SE has no effect on the direction of CN DATANG i.e., CN DATANG and Strer SE go up and down completely randomly.

Pair Corralation between CN DATANG and Strer SE

If you would invest  11.00  in CN DATANG C on October 9, 2024 and sell it today you would earn a total of  13.00  from holding CN DATANG C or generate 118.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CN DATANG C  vs.  Strer SE Co

CN DATANG C

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CN DATANG C are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, CN DATANG unveiled solid returns over the last few months and may actually be approaching a breakup point.

Strer SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strer SE Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Strer SE is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CN DATANG and Strer SE

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

The idea behind CN DATANG C and Strer SE Co 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.