Correlation Between Chindata Group and Roche Holding
Can any of the company-specific risk be diversified away by investing in both Chindata Group and Roche Holding 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 Chindata Group and Roche Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chindata Group Holdings and Roche Holding AG, you can compare the effects of market volatilities on Chindata Group and Roche Holding 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 Chindata Group with a short position of Roche Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chindata Group and Roche Holding.
Diversification Opportunities for Chindata Group and Roche Holding
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chindata and Roche is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Chindata Group Holdings and Roche Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roche Holding AG and Chindata Group 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 Chindata Group Holdings are associated (or correlated) with Roche Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roche Holding AG has no effect on the direction of Chindata Group i.e., Chindata Group and Roche Holding go up and down completely randomly.
Pair Corralation between Chindata Group and Roche Holding
Allowing for the 90-day total investment horizon Chindata Group Holdings is expected to generate 1.83 times more return on investment than Roche Holding. However, Chindata Group is 1.83 times more volatile than Roche Holding AG. It trades about 0.04 of its potential returns per unit of risk. Roche Holding AG is currently generating about -0.03 per unit of risk. If you would invest 626.00 in Chindata Group Holdings on January 21, 2024 and sell it today you would earn a total of 219.00 from holding Chindata Group Holdings or generate 34.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 83.06% |
| Values | Daily Returns |
Chindata Group Holdings vs. Roche Holding AG
Performance |
| Timeline |
| Chindata Group Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Roche Holding AG |
Chindata Group and Roche Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chindata Group and Roche Holding
The main advantage of trading using opposite Chindata Group and Roche Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chindata Group position performs unexpectedly, Roche Holding 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 Roche Holding will offset losses from the drop in Roche Holding's long position.| Chindata Group vs. GDS Holdings | Chindata Group vs. Thoughtworks Holding | Chindata Group vs. ExlService Holdings | Chindata Group vs. Gartner |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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