Correlation Between DBT SA and Vergnet
Can any of the company-specific risk be diversified away by investing in both DBT SA and Vergnet 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 DBT SA and Vergnet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DBT SA and Vergnet, you can compare the effects of market volatilities on DBT SA and Vergnet 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 DBT SA with a short position of Vergnet. Check out your portfolio center. Please also check ongoing floating volatility patterns of DBT SA and Vergnet.
Diversification Opportunities for DBT SA and Vergnet
Very poor diversification
The 3 months correlation between DBT and Vergnet is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding DBT SA and Vergnet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vergnet and DBT SA 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 DBT SA are associated (or correlated) with Vergnet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vergnet has no effect on the direction of DBT SA i.e., DBT SA and Vergnet go up and down completely randomly.
Pair Corralation between DBT SA and Vergnet
Assuming the 90 days trading horizon DBT SA is expected to generate 0.83 times more return on investment than Vergnet. However, DBT SA is 1.21 times less risky than Vergnet. It trades about -0.14 of its potential returns per unit of risk. Vergnet is currently generating about -0.37 per unit of risk. If you would invest 280.00 in DBT SA on August 27, 2024 and sell it today you would lose (232.00) from holding DBT SA or give up 82.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DBT SA vs. Vergnet
Performance |
| Timeline |
| DBT SA |
| Vergnet |
DBT SA and Vergnet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DBT SA and Vergnet
The main advantage of trading using opposite DBT SA and Vergnet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DBT SA position performs unexpectedly, Vergnet 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 Vergnet will offset losses from the drop in Vergnet's long position.| DBT SA vs. Prodways Group SA | DBT SA vs. Claranova SE | DBT SA vs. DBV Technologies SA | DBT SA vs. Ossiam Minimum Variance |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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