Correlation Between DFS Furniture and ARDAGH METAL
Can any of the company-specific risk be diversified away by investing in both DFS Furniture and ARDAGH METAL 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 ARDAGH METAL 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 ARDAGH METAL PACDL 0001, you can compare the effects of market volatilities on DFS Furniture and ARDAGH METAL 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 ARDAGH METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and ARDAGH METAL.
Diversification Opportunities for DFS Furniture and ARDAGH METAL
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between DFS and ARDAGH is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC and ARDAGH METAL PACDL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARDAGH METAL PACDL 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 ARDAGH METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARDAGH METAL PACDL has no effect on the direction of DFS Furniture i.e., DFS Furniture and ARDAGH METAL go up and down completely randomly.
Pair Corralation between DFS Furniture and ARDAGH METAL
Assuming the 90 days trading horizon DFS Furniture PLC is expected to generate 0.57 times more return on investment than ARDAGH METAL. However, DFS Furniture PLC is 1.76 times less risky than ARDAGH METAL. It trades about 0.29 of its potential returns per unit of risk. ARDAGH METAL PACDL 0001 is currently generating about -0.03 per unit of risk. If you would invest 152.00 in DFS Furniture PLC on November 29, 2024 and sell it today you would earn a total of 14.00 from holding DFS Furniture PLC or generate 9.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFS Furniture PLC vs. ARDAGH METAL PACDL 0001
Performance |
| Timeline |
| DFS Furniture PLC |
| ARDAGH METAL PACDL |
DFS Furniture and ARDAGH METAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and ARDAGH METAL
The main advantage of trading using opposite DFS Furniture and ARDAGH METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture position performs unexpectedly, ARDAGH METAL 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 ARDAGH METAL will offset losses from the drop in ARDAGH METAL's long position.| DFS Furniture vs. SOGECLAIR SA INH | DFS Furniture vs. Alaska Air Group | DFS Furniture vs. GRUPO CARSO A1 | DFS Furniture vs. GEELY AUTOMOBILE |
| ARDAGH METAL vs. KENEDIX OFFICE INV | ARDAGH METAL vs. VIVA WINE GROUP | ARDAGH METAL vs. CAIRN HOMES EO | ARDAGH METAL vs. Ares Management Corp |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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