Correlation Between Datang International and Pampa Energa
Can any of the company-specific risk be diversified away by investing in both Datang International and Pampa Energa 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 Energa 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 Energa SA, you can compare the effects of market volatilities on Datang International and Pampa Energa 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 Energa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang International and Pampa Energa.
Diversification Opportunities for Datang International and Pampa Energa
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Datang and Pampa is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Datang International Power and Pampa Energa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pampa Energa 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 Energa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pampa Energa SA has no effect on the direction of Datang International i.e., Datang International and Pampa Energa go up and down completely randomly.
Pair Corralation between Datang International and Pampa Energa
Assuming the 90 days horizon Datang International is expected to generate 3.09 times less return on investment than Pampa Energa. In addition to that, Datang International is 1.31 times more volatile than Pampa Energa SA. It trades about 0.07 of its total potential returns per unit of risk. Pampa Energa SA is currently generating about 0.29 per unit of volatility. If you would invest 5,350 in Pampa Energa SA on September 25, 2024 and sell it today you would earn a total of 3,050 from holding Pampa Energa SA or generate 57.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Datang International Power vs. Pampa Energa SA
Performance |
Timeline |
Datang International |
Pampa Energa SA |
Datang International and Pampa Energa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Datang International and Pampa Energa
The main advantage of trading using opposite Datang International and Pampa Energa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang International position performs unexpectedly, Pampa Energa 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 Energa will offset losses from the drop in Pampa Energa's long position.Datang International vs. Siemens Energy AG | Datang International vs. Contact Energy Limited | Datang International vs. Pampa Energa SA |
Pampa Energa vs. Siemens Energy AG | Pampa Energa vs. Datang International Power | Pampa Energa vs. Contact Energy Limited |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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