Correlation Between Computershare and CN DATANG

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

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

Diversification Opportunities for Computershare and CN DATANG

0.06

Correlation Coefficient

Computershare  CN DATANG

Significant diversification

The 3 months correlation between Computershare and DT7 is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Computershare Limited and CN DATANG C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN DATANG C and Computershare 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 Computershare Limited are associated (or correlated) with CN DATANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN DATANG C has no effect on the direction of Computershare i.e., Computershare and CN DATANG go up and down completely randomly.

Pair Corralation between Computershare and CN DATANG

Assuming the 90 days horizon Computershare is expected to generate 1.17 times less return on investment than CN DATANG. But when comparing it to its historical volatility, Computershare Limited is 1.67 times less risky than CN DATANG. It trades about 0.09 of its potential returns per unit of risk. CN DATANG C is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  23.00  in CN DATANG C on April 20, 2025 and sell it today you would earn a total of  2.00  from holding CN DATANG C or generate 8.7% return on investment over 90 days.

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

Computershare Limited  vs.  CN DATANG C

Computershare Limited

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Computershare Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Computershare may actually be approaching a critical reversion point that can send shares even higher in August 2025.

CN DATANG C

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CN DATANG C are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CN DATANG may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Computershare and CN DATANG

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

The idea behind Computershare Limited and CN DATANG C 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.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.