Correlation Between DATAGROUP and ConocoPhillips

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

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

Diversification Opportunities for DATAGROUP and ConocoPhillips

0.0

Correlation Coefficient

DATAGROUP  ConocoPhillips

Pay attention - limited upside

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

Pair Corralation between DATAGROUP and ConocoPhillips

Assuming the 90 days trading horizon DATAGROUP SE is expected to generate 1.28 times more return on investment than ConocoPhillips. However, DATAGROUP is 1.28 times more volatile than ConocoPhillips. It trades about 0.15 of its potential returns per unit of risk. ConocoPhillips is currently generating about 0.05 per unit of risk. If you would invest  3,875  in DATAGROUP SE on September 15, 2024 and sell it today you would earn a total of  990.00  from holding DATAGROUP SE or generate 25.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

DATAGROUP SE  vs.  ConocoPhillips

DATAGROUP SE

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DATAGROUP SE are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical indicators, DATAGROUP unveiled solid returns over the last few months and may actually be approaching a breakup point.

ConocoPhillips

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ConocoPhillips are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ConocoPhillips is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with DATAGROUP and ConocoPhillips

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

The idea behind DATAGROUP SE and ConocoPhillips 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.