Correlation Between Datagroup and European Metals
Can any of the company-specific risk be diversified away by investing in both Datagroup and European Metals 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 Datagroup and European Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Datagroup SE and European Metals Holdings, you can compare the effects of market volatilities on Datagroup and European Metals 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 Datagroup with a short position of European Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datagroup and European Metals.
Diversification Opportunities for Datagroup and European Metals
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Datagroup and European is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Datagroup SE and European Metals Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on European Metals Holdings and Datagroup 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 Datagroup SE are associated (or correlated) with European Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of European Metals Holdings has no effect on the direction of Datagroup i.e., Datagroup and European Metals go up and down completely randomly.
Pair Corralation between Datagroup and European Metals
Assuming the 90 days trading horizon Datagroup SE is expected to under-perform the European Metals. But the stock apears to be less risky and, when comparing its historical volatility, Datagroup SE is 1.57 times less risky than European Metals. The stock trades about -0.1 of its potential returns per unit of risk. The European Metals Holdings is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 725.00 in European Metals Holdings on October 11, 2024 and sell it today you would earn a total of 113.00 from holding European Metals Holdings or generate 15.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Datagroup SE vs. European Metals Holdings
Performance |
| Timeline |
| Datagroup SE |
| European Metals Holdings |
Datagroup and European Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datagroup and European Metals
The main advantage of trading using opposite Datagroup and European Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datagroup position performs unexpectedly, European Metals 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 European Metals will offset losses from the drop in European Metals' long position.| Datagroup vs. Walmart | Datagroup vs. BYD Co | Datagroup vs. Volkswagen AG | Datagroup vs. Volkswagen AG Non Vtg |
| European Metals vs. Tyson Foods Cl | European Metals vs. Datagroup SE | European Metals vs. First Class Metals | European Metals vs. Dairy Farm International |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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