Correlation Between Dolly Varden and Givaudan
Can any of the company-specific risk be diversified away by investing in both Dolly Varden and Givaudan 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 Dolly Varden and Givaudan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dolly Varden Silver and Givaudan SA, you can compare the effects of market volatilities on Dolly Varden and Givaudan 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 Dolly Varden with a short position of Givaudan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dolly Varden and Givaudan.
Diversification Opportunities for Dolly Varden and Givaudan
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dolly and Givaudan is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dolly Varden Silver and Givaudan SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Givaudan SA and Dolly Varden 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 Dolly Varden Silver are associated (or correlated) with Givaudan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Givaudan SA has no effect on the direction of Dolly Varden i.e., Dolly Varden and Givaudan go up and down completely randomly.
Pair Corralation between Dolly Varden and Givaudan
Assuming the 90 days trading horizon Dolly Varden Silver is expected to generate 4.74 times more return on investment than Givaudan. However, Dolly Varden is 4.74 times more volatile than Givaudan SA. It trades about 0.1 of its potential returns per unit of risk. Givaudan SA is currently generating about 0.07 per unit of risk. If you would invest 68.00 in Dolly Varden Silver on September 1, 2024 and sell it today you would earn a total of 41.00 from holding Dolly Varden Silver or generate 60.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 29.26% |
| Values | Daily Returns |
Dolly Varden Silver vs. Givaudan SA
Performance |
| Timeline |
| Dolly Varden Silver |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Givaudan SA |
Dolly Varden and Givaudan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dolly Varden and Givaudan
The main advantage of trading using opposite Dolly Varden and Givaudan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dolly Varden position performs unexpectedly, Givaudan 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 Givaudan will offset losses from the drop in Givaudan's long position.| Dolly Varden vs. PPHE Hotel Group | Dolly Varden vs. Infrastrutture Wireless Italiane | Dolly Varden vs. Trainline Plc | Dolly Varden vs. Gear4music Plc |
| Givaudan vs. Antofagasta PLC | Givaudan vs. Centamin PLC | Givaudan vs. Atalaya Mining | Givaudan vs. Ferrexpo PLC |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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