Correlation Between Auction Technology and DFS Furniture
Can any of the company-specific risk be diversified away by investing in both Auction Technology and DFS Furniture 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 Auction Technology and DFS Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auction Technology Group and DFS Furniture PLC, you can compare the effects of market volatilities on Auction Technology and DFS Furniture 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 Auction Technology with a short position of DFS Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auction Technology and DFS Furniture.
Diversification Opportunities for Auction Technology and DFS Furniture
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Auction and DFS is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Auction Technology Group and DFS Furniture PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFS Furniture PLC and Auction Technology 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 Auction Technology Group are associated (or correlated) with DFS Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFS Furniture PLC has no effect on the direction of Auction Technology i.e., Auction Technology and DFS Furniture go up and down completely randomly.
Pair Corralation between Auction Technology and DFS Furniture
Assuming the 90 days trading horizon Auction Technology Group is expected to generate 0.94 times more return on investment than DFS Furniture. However, Auction Technology Group is 1.06 times less risky than DFS Furniture. It trades about 0.27 of its potential returns per unit of risk. DFS Furniture PLC is currently generating about -0.08 per unit of risk. If you would invest 54,900 in Auction Technology Group on November 6, 2024 and sell it today you would earn a total of 6,900 from holding Auction Technology Group or generate 12.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auction Technology Group vs. DFS Furniture PLC
Performance |
| Timeline |
| Auction Technology |
| DFS Furniture PLC |
Auction Technology and DFS Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auction Technology and DFS Furniture
The main advantage of trading using opposite Auction Technology and DFS Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auction Technology position performs unexpectedly, DFS Furniture 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 DFS Furniture will offset losses from the drop in DFS Furniture's long position.| Auction Technology vs. Zoom Video Communications | Auction Technology vs. Empire Metals Limited | Auction Technology vs. Cairo Communication SpA | Auction Technology vs. GoldMining |
| DFS Furniture vs. FC Investment Trust | DFS Furniture vs. Vietnam Enterprise Investments | DFS Furniture vs. Kinnevik Investment AB | DFS Furniture vs. OneSavings Bank 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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