Correlation Between Bankers Investment and DFS Furniture
Can any of the company-specific risk be diversified away by investing in both Bankers Investment 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 Bankers Investment and DFS Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bankers Investment Trust and DFS Furniture PLC, you can compare the effects of market volatilities on Bankers Investment 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 Bankers Investment with a short position of DFS Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankers Investment and DFS Furniture.
Diversification Opportunities for Bankers Investment and DFS Furniture
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bankers and DFS is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bankers Investment Trust 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 Bankers Investment 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 Bankers Investment Trust 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 Bankers Investment i.e., Bankers Investment and DFS Furniture go up and down completely randomly.
Pair Corralation between Bankers Investment and DFS Furniture
Assuming the 90 days trading horizon Bankers Investment Trust is expected to generate 0.59 times more return on investment than DFS Furniture. However, Bankers Investment Trust is 1.7 times less risky than DFS Furniture. It trades about 0.07 of its potential returns per unit of risk. DFS Furniture PLC is currently generating about -0.3 per unit of risk. If you would invest 11,640 in Bankers Investment Trust on October 12, 2024 and sell it today you would earn a total of 100.00 from holding Bankers Investment Trust or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bankers Investment Trust vs. DFS Furniture PLC
Performance |
| Timeline |
| Bankers Investment Trust |
| DFS Furniture PLC |
Bankers Investment and DFS Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankers Investment and DFS Furniture
The main advantage of trading using opposite Bankers Investment and DFS Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankers Investment 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.| Bankers Investment vs. Eneraqua Technologies PLC | Bankers Investment vs. Spotify Technology SA | Bankers Investment vs. Blackrock World Mining | Bankers Investment vs. Technicolor |
| DFS Furniture vs. Batm Advanced Communications | DFS Furniture vs. Ecclesiastical Insurance Office | DFS Furniture vs. LPKF Laser Electronics | DFS Furniture vs. Bankers Investment Trust |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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