Correlation Between Continental Aktiengesellscha and Dno ASA
Can any of the company-specific risk be diversified away by investing in both Continental Aktiengesellscha and Dno ASA 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 Continental Aktiengesellscha and Dno ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Continental Aktiengesellschaft and Dno ASA, you can compare the effects of market volatilities on Continental Aktiengesellscha and Dno ASA 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 Continental Aktiengesellscha with a short position of Dno ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Continental Aktiengesellscha and Dno ASA.
Diversification Opportunities for Continental Aktiengesellscha and Dno ASA
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Continental and Dno is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Continental Aktiengesellschaft and Dno ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dno ASA and Continental Aktiengesellscha 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 Continental Aktiengesellschaft are associated (or correlated) with Dno ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dno ASA has no effect on the direction of Continental Aktiengesellscha i.e., Continental Aktiengesellscha and Dno ASA go up and down completely randomly.
Pair Corralation between Continental Aktiengesellscha and Dno ASA
Assuming the 90 days trading horizon Continental Aktiengesellschaft is expected to under-perform the Dno ASA. But the stock apears to be less risky and, when comparing its historical volatility, Continental Aktiengesellschaft is 1.53 times less risky than Dno ASA. The stock trades about -0.06 of its potential returns per unit of risk. The Dno ASA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,328 in Dno ASA on October 11, 2024 and sell it today you would earn a total of 1.00 from holding Dno ASA or generate 0.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Continental Aktiengesellschaft vs. Dno ASA
Performance |
| Timeline |
| Continental Aktiengesellscha |
| Dno ASA |
Continental Aktiengesellscha and Dno ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Continental Aktiengesellscha and Dno ASA
The main advantage of trading using opposite Continental Aktiengesellscha and Dno ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Continental Aktiengesellscha position performs unexpectedly, Dno ASA 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 Dno ASA will offset losses from the drop in Dno ASA's long position.The idea behind Continental Aktiengesellschaft and Dno ASA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Dno ASA vs. PT Astra International | Dno ASA vs. Superior Plus Corp | Dno ASA vs. NMI Holdings | Dno ASA vs. SIVERS SEMICONDUCTORS AB |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |