Correlation Between DFS Furniture and GRUPO CARSO-A1
Can any of the company-specific risk be diversified away by investing in both DFS Furniture and GRUPO CARSO-A1 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 DFS Furniture and GRUPO CARSO-A1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFS Furniture PLC and GRUPO CARSO A1, you can compare the effects of market volatilities on DFS Furniture and GRUPO CARSO-A1 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 DFS Furniture with a short position of GRUPO CARSO-A1. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and GRUPO CARSO-A1.
Diversification Opportunities for DFS Furniture and GRUPO CARSO-A1
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DFS and GRUPO is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC and GRUPO CARSO A1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRUPO CARSO A1 and DFS Furniture 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 DFS Furniture PLC are associated (or correlated) with GRUPO CARSO-A1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRUPO CARSO A1 has no effect on the direction of DFS Furniture i.e., DFS Furniture and GRUPO CARSO-A1 go up and down completely randomly.
Pair Corralation between DFS Furniture and GRUPO CARSO-A1
Assuming the 90 days trading horizon DFS Furniture PLC is expected to generate 0.47 times more return on investment than GRUPO CARSO-A1. However, DFS Furniture PLC is 2.14 times less risky than GRUPO CARSO-A1. It trades about 0.01 of its potential returns per unit of risk. GRUPO CARSO A1 is currently generating about 0.0 per unit of risk. If you would invest 158.00 in DFS Furniture PLC on August 25, 2024 and sell it today you would earn a total of 0.00 from holding DFS Furniture PLC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
DFS Furniture PLC vs. GRUPO CARSO A1
Performance |
| Timeline |
| DFS Furniture PLC |
| GRUPO CARSO A1 |
DFS Furniture and GRUPO CARSO-A1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and GRUPO CARSO-A1
The main advantage of trading using opposite DFS Furniture and GRUPO CARSO-A1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture position performs unexpectedly, GRUPO CARSO-A1 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 GRUPO CARSO-A1 will offset losses from the drop in GRUPO CARSO-A1's long position.| DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc |
| GRUPO CARSO-A1 vs. Apple Inc | GRUPO CARSO-A1 vs. Apple Inc | GRUPO CARSO-A1 vs. Apple Inc | GRUPO CARSO-A1 vs. Apple Inc |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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