Correlation Between FORTRESS BIOTECHPRFA and China DatangRenewable

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

By analyzing existing cross correlation between FORTRESS BIOTECHPRFA 25 and China Datang, you can compare the effects of market volatilities on FORTRESS BIOTECHPRFA and China DatangRenewable 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 FORTRESS BIOTECHPRFA with a short position of China DatangRenewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORTRESS BIOTECHPRFA and China DatangRenewable.

Diversification Opportunities for FORTRESS BIOTECHPRFA and China DatangRenewable

0.0

Correlation Coefficient

FORTRESS BIOTECHPRFA  China DatangRenewable

Pay attention - limited upside

The 3 months correlation between FORTRESS and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FORTRESS BIOTECHPRFA 25 and China Datang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China DatangRenewable and FORTRESS BIOTECHPRFA 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 FORTRESS BIOTECHPRFA 25 are associated (or correlated) with China DatangRenewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China DatangRenewable has no effect on the direction of FORTRESS BIOTECHPRFA i.e., FORTRESS BIOTECHPRFA and China DatangRenewable go up and down completely randomly.

Pair Corralation between FORTRESS BIOTECHPRFA and China DatangRenewable

Assuming the 90 days trading horizon FORTRESS BIOTECHPRFA 25 is expected to generate 2.27 times more return on investment than China DatangRenewable. However, FORTRESS BIOTECHPRFA is 2.27 times more volatile than China Datang. It trades about 0.08 of its potential returns per unit of risk. China Datang is currently generating about 0.04 per unit of risk. If you would invest  560.00  in FORTRESS BIOTECHPRFA 25 on May 22, 2025 and sell it today you would earn a total of  100.00  from holding FORTRESS BIOTECHPRFA 25 or generate 17.86% return on investment over 90 days.

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

FORTRESS BIOTECHPRFA 25  vs.  China Datang

FORTRESS BIOTECHPRFA

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in FORTRESS BIOTECHPRFA 25 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, FORTRESS BIOTECHPRFA reported solid returns over the last few months and may actually be approaching a breakup point.

China DatangRenewable

Risk-Adjusted Performance

Soft

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

Pair Trading with FORTRESS BIOTECHPRFA and China DatangRenewable

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

The idea behind FORTRESS BIOTECHPRFA 25 and China Datang 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..