Correlation Between DFS Furniture and COSCO SHIPPING
Can any of the company-specific risk be diversified away by investing in both DFS Furniture and COSCO SHIPPING 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 COSCO SHIPPING 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 COSCO SHIPPING Energy, you can compare the effects of market volatilities on DFS Furniture and COSCO SHIPPING 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 COSCO SHIPPING. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and COSCO SHIPPING.
Diversification Opportunities for DFS Furniture and COSCO SHIPPING
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DFS and COSCO is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC and COSCO SHIPPING Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCO SHIPPING Energy 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 COSCO SHIPPING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSCO SHIPPING Energy has no effect on the direction of DFS Furniture i.e., DFS Furniture and COSCO SHIPPING go up and down completely randomly.
Pair Corralation between DFS Furniture and COSCO SHIPPING
Assuming the 90 days trading horizon DFS Furniture is expected to generate 4.44 times less return on investment than COSCO SHIPPING. But when comparing it to its historical volatility, DFS Furniture PLC is 1.89 times less risky than COSCO SHIPPING. It trades about 0.03 of its potential returns per unit of risk. COSCO SHIPPING Energy is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 38.00 in COSCO SHIPPING Energy on September 14, 2024 and sell it today you would earn a total of 37.00 from holding COSCO SHIPPING Energy or generate 97.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFS Furniture PLC vs. COSCO SHIPPING Energy
Performance |
| Timeline |
| DFS Furniture PLC |
| COSCO SHIPPING Energy |
DFS Furniture and COSCO SHIPPING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and COSCO SHIPPING
The main advantage of trading using opposite DFS Furniture and COSCO SHIPPING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture position performs unexpectedly, COSCO SHIPPING 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 COSCO SHIPPING will offset losses from the drop in COSCO SHIPPING's long position.| DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc |
| COSCO SHIPPING vs. Verizon Communications | COSCO SHIPPING vs. Singapore Telecommunications Limited | COSCO SHIPPING vs. Ribbon Communications | COSCO SHIPPING vs. Nordic Semiconductor ASA |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |