Correlation Between Dedicare and Desenio Group
Can any of the company-specific risk be diversified away by investing in both Dedicare and Desenio 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 Desenio 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 Desenio Group AB, you can compare the effects of market volatilities on Dedicare and Desenio 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 Desenio Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dedicare and Desenio Group.
Diversification Opportunities for Dedicare and Desenio Group
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dedicare and Desenio is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Dedicare AB and Desenio Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desenio 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 Desenio Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Desenio Group AB has no effect on the direction of Dedicare i.e., Dedicare and Desenio Group go up and down completely randomly.
Pair Corralation between Dedicare and Desenio Group
Assuming the 90 days trading horizon Dedicare AB is expected to under-perform the Desenio Group. But the stock apears to be less risky and, when comparing its historical volatility, Dedicare AB is 3.13 times less risky than Desenio Group. The stock trades about -0.05 of its potential returns per unit of risk. The Desenio Group AB is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 30.00 in Desenio Group AB on September 12, 2024 and sell it today you would lose (2.00) from holding Desenio Group AB or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dedicare AB vs. Desenio Group AB
Performance |
| Timeline |
| Dedicare AB |
| Desenio Group AB |
Dedicare and Desenio Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dedicare and Desenio Group
The main advantage of trading using opposite Dedicare and Desenio Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dedicare position performs unexpectedly, Desenio 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 Desenio Group will offset losses from the drop in Desenio Group's long position.The idea behind Dedicare AB and Desenio 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.| Desenio Group vs. Rugvista Group AB | Desenio Group vs. Cint Group AB | Desenio Group vs. BHG Group AB | Desenio Group vs. Lyko Group A |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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