Correlation Between Dantax and Stenocare
Can any of the company-specific risk be diversified away by investing in both Dantax and Stenocare 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 Dantax and Stenocare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dantax and Stenocare AS, you can compare the effects of market volatilities on Dantax and Stenocare 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 Dantax with a short position of Stenocare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dantax and Stenocare.
Diversification Opportunities for Dantax and Stenocare
Very good diversification
The 3 months correlation between Dantax and Stenocare is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Dantax and Stenocare AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stenocare AS and Dantax 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 Dantax are associated (or correlated) with Stenocare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stenocare AS has no effect on the direction of Dantax i.e., Dantax and Stenocare go up and down completely randomly.
Pair Corralation between Dantax and Stenocare
Assuming the 90 days trading horizon Dantax is expected to under-perform the Stenocare. But the stock apears to be less risky and, when comparing its historical volatility, Dantax is 5.29 times less risky than Stenocare. The stock trades about -0.26 of its potential returns per unit of risk. The Stenocare AS is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 157.00 in Stenocare AS on August 28, 2024 and sell it today you would earn a total of 55.00 from holding Stenocare AS or generate 35.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dantax vs. Stenocare AS
Performance |
| Timeline |
| Dantax |
| Stenocare AS |
Dantax and Stenocare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dantax and Stenocare
The main advantage of trading using opposite Dantax and Stenocare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dantax position performs unexpectedly, Stenocare 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 Stenocare will offset losses from the drop in Stenocare's long position.The idea behind Dantax and Stenocare AS 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.| Stenocare vs. Sparinvest INDEX Globale | Stenocare vs. Bavarian Nordic | Stenocare vs. Investeringsselskabet Luxor AS | Stenocare vs. cBrain AS |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |