Correlation Between DATAGROUP and Stewart Information
Can any of the company-specific risk be diversified away by investing in both DATAGROUP and Stewart Information 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 DATAGROUP and Stewart Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DATAGROUP SE and Stewart Information Services, you can compare the effects of market volatilities on DATAGROUP and Stewart Information 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 DATAGROUP with a short position of Stewart Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of DATAGROUP and Stewart Information.
Diversification Opportunities for DATAGROUP and Stewart Information
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DATAGROUP and Stewart is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding DATAGROUP SE and Stewart Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stewart Information and DATAGROUP 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 DATAGROUP SE are associated (or correlated) with Stewart Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stewart Information has no effect on the direction of DATAGROUP i.e., DATAGROUP and Stewart Information go up and down completely randomly.
Pair Corralation between DATAGROUP and Stewart Information
Assuming the 90 days trading horizon DATAGROUP SE is expected to generate 0.91 times more return on investment than Stewart Information. However, DATAGROUP SE is 1.1 times less risky than Stewart Information. It trades about -0.08 of its potential returns per unit of risk. Stewart Information Services is currently generating about -0.18 per unit of risk. If you would invest 4,650 in DATAGROUP SE on November 3, 2024 and sell it today you would lose (280.00) from holding DATAGROUP SE or give up 6.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.5% |
| Values | Daily Returns |
DATAGROUP SE vs. Stewart Information Services
Performance |
| Timeline |
| DATAGROUP SE |
| Stewart Information |
DATAGROUP and Stewart Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DATAGROUP and Stewart Information
The main advantage of trading using opposite DATAGROUP and Stewart Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DATAGROUP position performs unexpectedly, Stewart Information 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 Stewart Information will offset losses from the drop in Stewart Information's long position.| DATAGROUP vs. Automatic Data Processing | DATAGROUP vs. Synovus Financial Corp | DATAGROUP vs. Pure Storage | DATAGROUP vs. BANK OF CHINA |
| Stewart Information vs. URBAN OUTFITTERS | Stewart Information vs. Eidesvik Offshore ASA | Stewart Information vs. Transport International Holdings | Stewart Information vs. Broadcom |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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