Correlation Between DFS Furniture and TSOGO SUN
Can any of the company-specific risk be diversified away by investing in both DFS Furniture and TSOGO SUN 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 TSOGO SUN 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 TSOGO SUN GAMING, you can compare the effects of market volatilities on DFS Furniture and TSOGO SUN 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 TSOGO SUN. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and TSOGO SUN.
Diversification Opportunities for DFS Furniture and TSOGO SUN
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between DFS and TSOGO is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC and TSOGO SUN GAMING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TSOGO SUN GAMING 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 TSOGO SUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TSOGO SUN GAMING has no effect on the direction of DFS Furniture i.e., DFS Furniture and TSOGO SUN go up and down completely randomly.
Pair Corralation between DFS Furniture and TSOGO SUN
Assuming the 90 days trading horizon DFS Furniture PLC is expected to generate 1.98 times more return on investment than TSOGO SUN. However, DFS Furniture is 1.98 times more volatile than TSOGO SUN GAMING. It trades about 0.11 of its potential returns per unit of risk. TSOGO SUN GAMING is currently generating about -0.37 per unit of risk. If you would invest 155.00 in DFS Furniture PLC on September 1, 2024 and sell it today you would earn a total of 7.00 from holding DFS Furniture PLC or generate 4.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFS Furniture PLC vs. TSOGO SUN GAMING
Performance |
| Timeline |
| DFS Furniture PLC |
| TSOGO SUN GAMING |
DFS Furniture and TSOGO SUN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and TSOGO SUN
The main advantage of trading using opposite DFS Furniture and TSOGO SUN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture position performs unexpectedly, TSOGO SUN 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 TSOGO SUN will offset losses from the drop in TSOGO SUN's long position.| DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc |
| TSOGO SUN vs. Superior Plus Corp | TSOGO SUN vs. NMI Holdings | TSOGO SUN vs. Origin Agritech | TSOGO SUN vs. SIVERS SEMICONDUCTORS 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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