Correlation Between Datang International and DATAGROUP

Can any of the company-specific risk be diversified away by investing in both Datang International and DATAGROUP 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 DATAGROUP 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 DATAGROUP SE, you can compare the effects of market volatilities on Datang International and DATAGROUP 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 DATAGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang International and DATAGROUP.

Diversification Opportunities for Datang International and DATAGROUP

0.73

Correlation Coefficient

Datang International  DATAGROUP

Poor diversification

The 3 months correlation between Datang and DATAGROUP is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Datang International Power and DATAGROUP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATAGROUP SE 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 DATAGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATAGROUP SE has no effect on the direction of Datang International i.e., Datang International and DATAGROUP go up and down completely randomly.

Pair Corralation between Datang International and DATAGROUP

Assuming the 90 days horizon Datang International Power is expected to generate 4.2 times more return on investment than DATAGROUP. However, Datang International is 4.2 times more volatile than DATAGROUP SE. It trades about 0.11 of its potential returns per unit of risk. DATAGROUP SE is currently generating about 0.22 per unit of risk. If you would invest  17.00  in Datang International Power on April 22, 2025 and sell it today you would earn a total of  4.00  from holding Datang International Power or generate 23.53% return on investment over 90 days.

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

Datang International Power  vs.  DATAGROUP SE

Datang International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Datang International Power are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Datang International reported solid returns over the last few months and may actually be approaching a breakup point.

DATAGROUP SE

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in DATAGROUP SE are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical indicators, DATAGROUP may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Datang International and DATAGROUP

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

The idea behind Datang International Power and DATAGROUP SE 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.