Correlation Between DATANG INTL and DICKER DATA

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

By analyzing existing cross correlation between DATANG INTL POW and DICKER DATA LTD, you can compare the effects of market volatilities on DATANG INTL and DICKER DATA 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 INTL with a short position of DICKER DATA. Check out your portfolio center. Please also check ongoing floating volatility patterns of DATANG INTL and DICKER DATA.

Diversification Opportunities for DATANG INTL and DICKER DATA

0.28

Correlation Coefficient

DATANG INTL  DICKER DATA

Modest diversification

The 3 months correlation between DATANG and DICKER is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding DATANG INTL POW and DICKER DATA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DICKER DATA LTD and DATANG INTL 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 INTL POW are associated (or correlated) with DICKER DATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DICKER DATA LTD has no effect on the direction of DATANG INTL i.e., DATANG INTL and DICKER DATA go up and down completely randomly.

Pair Corralation between DATANG INTL and DICKER DATA

Assuming the 90 days trading horizon DATANG INTL POW is expected to generate 2.07 times more return on investment than DICKER DATA. However, DATANG INTL is 2.07 times more volatile than DICKER DATA LTD. It trades about -0.01 of its potential returns per unit of risk. DICKER DATA LTD is currently generating about -0.1 per unit of risk. If you would invest  18.00  in DATANG INTL POW on September 28, 2024 and sell it today you would lose (1.00) from holding DATANG INTL POW or give up 5.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

DATANG INTL POW  vs.  DICKER DATA LTD

DATANG INTL POW

Risk-Adjusted Performance

0 of 100

Very Weak

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

DICKER DATA LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DICKER DATA LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with DATANG INTL and DICKER DATA

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

The idea behind DATANG INTL POW and DICKER DATA LTD 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 CEOs Directory module to screen CEOs from public companies around the world.