Correlation Between Dataproces Group and Newcap Holding
Can any of the company-specific risk be diversified away by investing in both Dataproces Group and Newcap Holding 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 Newcap Holding 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 Newcap Holding AS, you can compare the effects of market volatilities on Dataproces Group and Newcap Holding 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 Newcap Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dataproces Group and Newcap Holding.
Diversification Opportunities for Dataproces Group and Newcap Holding
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dataproces and Newcap is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Dataproces Group AS and Newcap Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newcap Holding 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 Newcap Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newcap Holding AS has no effect on the direction of Dataproces Group i.e., Dataproces Group and Newcap Holding go up and down completely randomly.
Pair Corralation between Dataproces Group and Newcap Holding
Assuming the 90 days trading horizon Dataproces Group is expected to generate 1.18 times less return on investment than Newcap Holding. But when comparing it to its historical volatility, Dataproces Group AS is 2.95 times less risky than Newcap Holding. It trades about 0.08 of its potential returns per unit of risk. Newcap Holding AS is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Newcap Holding AS on August 25, 2024 and sell it today you would lose (7.20) from holding Newcap Holding AS or give up 42.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dataproces Group AS vs. Newcap Holding AS
Performance |
| Timeline |
| Dataproces Group |
| Newcap Holding AS |
Dataproces Group and Newcap Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dataproces Group and Newcap Holding
The main advantage of trading using opposite Dataproces Group and Newcap Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dataproces Group position performs unexpectedly, Newcap Holding 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 Newcap Holding will offset losses from the drop in Newcap Holding's long position.| Dataproces Group vs. Penneo AS | Dataproces Group vs. Bactiquant AS | Dataproces Group vs. cBrain AS | Dataproces Group vs. FOM Technologies AS |
| Newcap Holding vs. SKAKO AS | Newcap Holding vs. Lollands Bank | Newcap Holding vs. Scandinavian Brake Systems | Newcap Holding vs. Rovsing 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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