Correlation Between BS Group and DGB Group
Can any of the company-specific risk be diversified away by investing in both BS Group and DGB 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 BS Group and DGB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BS Group SA and DGB Group NV, you can compare the effects of market volatilities on BS Group and DGB 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 BS Group with a short position of DGB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of BS Group and DGB Group.
Diversification Opportunities for BS Group and DGB Group
Very good diversification
The 3 months correlation between BSGR and DGB is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding BS Group SA and DGB Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DGB Group NV and BS Group 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 BS Group SA are associated (or correlated) with DGB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DGB Group NV has no effect on the direction of BS Group i.e., BS Group and DGB Group go up and down completely randomly.
Pair Corralation between BS Group and DGB Group
Assuming the 90 days trading horizon BS Group SA is expected to generate 0.34 times more return on investment than DGB Group. However, BS Group SA is 2.98 times less risky than DGB Group. It trades about -0.14 of its potential returns per unit of risk. DGB Group NV is currently generating about -0.27 per unit of risk. If you would invest 432.00 in BS Group SA on November 3, 2024 and sell it today you would lose (13.00) from holding BS Group SA or give up 3.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BS Group SA vs. DGB Group NV
Performance |
| Timeline |
| BS Group SA |
| DGB Group NV |
BS Group and DGB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BS Group and DGB Group
The main advantage of trading using opposite BS Group and DGB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BS Group position performs unexpectedly, DGB 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 DGB Group will offset losses from the drop in DGB Group's long position.| BS Group vs. ForFarmers NV | BS Group vs. Sligro Food Group | BS Group vs. Amsterdam Commodities NV | BS Group vs. Brunel International NV |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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