Correlation Between Dataproces Group and Erria AS
Can any of the company-specific risk be diversified away by investing in both Dataproces Group and Erria AS 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 Dataproces Group and Erria AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dataproces Group AS and Erria AS, you can compare the effects of market volatilities on Dataproces Group and Erria AS 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 Dataproces Group with a short position of Erria AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dataproces Group and Erria AS.
Diversification Opportunities for Dataproces Group and Erria AS
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dataproces and Erria is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Dataproces Group AS and Erria AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erria AS and Dataproces 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 Dataproces Group AS are associated (or correlated) with Erria AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erria AS has no effect on the direction of Dataproces Group i.e., Dataproces Group and Erria AS go up and down completely randomly.
Pair Corralation between Dataproces Group and Erria AS
Assuming the 90 days trading horizon Dataproces Group AS is expected to generate 1.24 times more return on investment than Erria AS. However, Dataproces Group is 1.24 times more volatile than Erria AS. It trades about -0.02 of its potential returns per unit of risk. Erria AS is currently generating about -0.08 per unit of risk. If you would invest 580.00 in Dataproces Group AS on August 31, 2024 and sell it today you would lose (15.00) from holding Dataproces Group AS or give up 2.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dataproces Group AS vs. Erria AS
Performance |
| Timeline |
| Dataproces Group |
| Erria AS |
Dataproces Group and Erria AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dataproces Group and Erria AS
The main advantage of trading using opposite Dataproces Group and Erria AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dataproces Group position performs unexpectedly, Erria AS 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 Erria AS will offset losses from the drop in Erria AS's long position.| Dataproces Group vs. Penneo AS | Dataproces Group vs. Bactiquant AS | Dataproces Group vs. cBrain AS | Dataproces Group vs. FOM Technologies AS |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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