Correlation Between Dedicare and Nimbus Group
Can any of the company-specific risk be diversified away by investing in both Dedicare and Nimbus Group 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 Dedicare and Nimbus Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dedicare AB and Nimbus Group AB, you can compare the effects of market volatilities on Dedicare and Nimbus Group 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 Dedicare with a short position of Nimbus Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dedicare and Nimbus Group.
Diversification Opportunities for Dedicare and Nimbus Group
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dedicare and Nimbus is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Dedicare AB and Nimbus Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nimbus Group AB and Dedicare 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 Dedicare AB are associated (or correlated) with Nimbus Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nimbus Group AB has no effect on the direction of Dedicare i.e., Dedicare and Nimbus Group go up and down completely randomly.
Pair Corralation between Dedicare and Nimbus Group
Assuming the 90 days trading horizon Dedicare AB is expected to generate 1.01 times more return on investment than Nimbus Group. However, Dedicare is 1.01 times more volatile than Nimbus Group AB. It trades about -0.02 of its potential returns per unit of risk. Nimbus Group AB is currently generating about -0.03 per unit of risk. If you would invest 9,962 in Dedicare AB on September 12, 2024 and sell it today you would lose (4,092) from holding Dedicare AB or give up 41.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dedicare AB vs. Nimbus Group AB
Performance |
| Timeline |
| Dedicare AB |
| Nimbus Group AB |
Dedicare and Nimbus Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dedicare and Nimbus Group
The main advantage of trading using opposite Dedicare and Nimbus Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dedicare position performs unexpectedly, Nimbus Group 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 Nimbus Group will offset losses from the drop in Nimbus Group's long position.The idea behind Dedicare AB and Nimbus Group AB 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.| Nimbus Group vs. Dometic Group AB | Nimbus Group vs. Garo AB | Nimbus Group vs. Byggmax Group AB | Nimbus Group vs. Nordnet AB |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |