Correlation Between COFCO Joycome and DBS Group
Can any of the company-specific risk be diversified away by investing in both COFCO Joycome and DBS Group 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 COFCO Joycome and DBS Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COFCO Joycome Foods and DBS Group Holdings, you can compare the effects of market volatilities on COFCO Joycome and DBS Group 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 COFCO Joycome with a short position of DBS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and DBS Group.
Diversification Opportunities for COFCO Joycome and DBS Group
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between COFCO and DBS is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and DBS Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBS Group Holdings and COFCO Joycome 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 COFCO Joycome Foods are associated (or correlated) with DBS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBS Group Holdings has no effect on the direction of COFCO Joycome i.e., COFCO Joycome and DBS Group go up and down completely randomly.
Pair Corralation between COFCO Joycome and DBS Group
Assuming the 90 days horizon COFCO Joycome Foods is expected to under-perform the DBS Group. In addition to that, COFCO Joycome is 2.94 times more volatile than DBS Group Holdings. It trades about -0.01 of its total potential returns per unit of risk. DBS Group Holdings is currently generating about 0.08 per unit of volatility. If you would invest 1,934 in DBS Group Holdings on September 1, 2024 and sell it today you would earn a total of 1,066 from holding DBS Group Holdings or generate 55.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
COFCO Joycome Foods vs. DBS Group Holdings
Performance |
| Timeline |
| COFCO Joycome Foods |
| DBS Group Holdings |
COFCO Joycome and DBS Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COFCO Joycome and DBS Group
The main advantage of trading using opposite COFCO Joycome and DBS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFCO Joycome position performs unexpectedly, DBS Group 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 DBS Group will offset losses from the drop in DBS Group's long position.| COFCO Joycome vs. Danone SA | COFCO Joycome vs. Superior Plus Corp | COFCO Joycome vs. NMI Holdings | COFCO Joycome vs. Origin Agritech |
| DBS Group vs. Dairy Farm International | DBS Group vs. Performance Food Group | DBS Group vs. Air Transport Services | DBS Group vs. COLUMBIA SPORTSWEAR |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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