Correlation Between AcadeMedia and Dometic Group
Can any of the company-specific risk be diversified away by investing in both AcadeMedia and Dometic 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 AcadeMedia and Dometic Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AcadeMedia AB and Dometic Group AB, you can compare the effects of market volatilities on AcadeMedia and Dometic 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 AcadeMedia with a short position of Dometic Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AcadeMedia and Dometic Group.
Diversification Opportunities for AcadeMedia and Dometic Group
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AcadeMedia and Dometic is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding AcadeMedia AB and Dometic Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dometic Group AB and AcadeMedia 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 AcadeMedia AB are associated (or correlated) with Dometic Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dometic Group AB has no effect on the direction of AcadeMedia i.e., AcadeMedia and Dometic Group go up and down completely randomly.
Pair Corralation between AcadeMedia and Dometic Group
Assuming the 90 days trading horizon AcadeMedia AB is expected to generate 0.73 times more return on investment than Dometic Group. However, AcadeMedia AB is 1.37 times less risky than Dometic Group. It trades about 0.06 of its potential returns per unit of risk. Dometic Group AB is currently generating about -0.11 per unit of risk. If you would invest 5,440 in AcadeMedia AB on September 1, 2024 and sell it today you would earn a total of 520.00 from holding AcadeMedia AB or generate 9.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AcadeMedia AB vs. Dometic Group AB
Performance |
| Timeline |
| AcadeMedia AB |
| Dometic Group AB |
AcadeMedia and Dometic Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AcadeMedia and Dometic Group
The main advantage of trading using opposite AcadeMedia and Dometic Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AcadeMedia position performs unexpectedly, Dometic 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 Dometic Group will offset losses from the drop in Dometic Group's long position.| AcadeMedia vs. Inwido AB | AcadeMedia vs. Dometic Group AB | AcadeMedia vs. Byggmax Group AB | AcadeMedia vs. Bravida Holding AB |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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