Correlation Between Dan Hotels and DNA Biomed
Can any of the company-specific risk be diversified away by investing in both Dan Hotels and DNA Biomed 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 Dan Hotels and DNA Biomed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dan Hotels and DNA Biomed Solns, you can compare the effects of market volatilities on Dan Hotels and DNA Biomed 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 Dan Hotels with a short position of DNA Biomed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dan Hotels and DNA Biomed.
Diversification Opportunities for Dan Hotels and DNA Biomed
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dan and DNA is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Dan Hotels and DNA Biomed Solns in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DNA Biomed Solns and Dan Hotels 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 Dan Hotels are associated (or correlated) with DNA Biomed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DNA Biomed Solns has no effect on the direction of Dan Hotels i.e., Dan Hotels and DNA Biomed go up and down completely randomly.
Pair Corralation between Dan Hotels and DNA Biomed
Assuming the 90 days trading horizon Dan Hotels is expected to under-perform the DNA Biomed. But the stock apears to be less risky and, when comparing its historical volatility, Dan Hotels is 3.93 times less risky than DNA Biomed. The stock trades about -0.05 of its potential returns per unit of risk. The DNA Biomed Solns is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7,620 in DNA Biomed Solns on August 27, 2024 and sell it today you would earn a total of 1,240 from holding DNA Biomed Solns or generate 16.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dan Hotels vs. DNA Biomed Solns
Performance |
| Timeline |
| Dan Hotels |
| DNA Biomed Solns |
Dan Hotels and DNA Biomed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dan Hotels and DNA Biomed
The main advantage of trading using opposite Dan Hotels and DNA Biomed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dan Hotels position performs unexpectedly, DNA Biomed 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 DNA Biomed will offset losses from the drop in DNA Biomed's long position.| Dan Hotels vs. Wesure Global Tech | Dan Hotels vs. ICL Israel Chemicals | Dan Hotels vs. Payment Financial Technologies | Dan Hotels vs. Millennium Food Tech LP |
| DNA Biomed vs. Meitav Trade Inv | DNA Biomed vs. Amot Investments | DNA Biomed vs. Skyline Investments | DNA Biomed vs. Alrov Properties Lodgings |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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