Correlation Between Daqo New and Amcor PLC
Can any of the company-specific risk be diversified away by investing in both Daqo New and Amcor PLC 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 Daqo New and Amcor PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daqo New Energy and Amcor PLC, you can compare the effects of market volatilities on Daqo New and Amcor PLC 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 Daqo New with a short position of Amcor PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daqo New and Amcor PLC.
Diversification Opportunities for Daqo New and Amcor PLC
Average diversification
The 3 months correlation between Daqo and Amcor is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Daqo New Energy and Amcor PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcor PLC and Daqo New 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 Daqo New Energy are associated (or correlated) with Amcor PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcor PLC has no effect on the direction of Daqo New i.e., Daqo New and Amcor PLC go up and down completely randomly.
Pair Corralation between Daqo New and Amcor PLC
Allowing for the 90-day total investment horizon Daqo New Energy is expected to under-perform the Amcor PLC. In addition to that, Daqo New is 2.61 times more volatile than Amcor PLC. It trades about -0.03 of its total potential returns per unit of risk. Amcor PLC is currently generating about 0.02 per unit of volatility. If you would invest 997.00 in Amcor PLC on July 6, 2024 and sell it today you would earn a total of 118.00 from holding Amcor PLC or generate 11.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Daqo New Energy vs. Amcor PLC
Performance |
Timeline |
Daqo New Energy |
Amcor PLC |
Daqo New and Amcor PLC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Daqo New and Amcor PLC
The main advantage of trading using opposite Daqo New and Amcor PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daqo New position performs unexpectedly, Amcor PLC 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 Amcor PLC will offset losses from the drop in Amcor PLC's long position.Daqo New vs. Axcelis Technologies | Daqo New vs. Kulicke and Soffa | Daqo New vs. Ultra Clean Holdings | Daqo New vs. Cohu Inc |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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