Correlation Between DFS Furniture and ADHI KARYA
Can any of the company-specific risk be diversified away by investing in both DFS Furniture and ADHI KARYA 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 ADHI KARYA 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 ADHI KARYA, you can compare the effects of market volatilities on DFS Furniture and ADHI KARYA 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 ADHI KARYA. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and ADHI KARYA.
Diversification Opportunities for DFS Furniture and ADHI KARYA
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DFS and ADHI is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC and ADHI KARYA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADHI KARYA 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 ADHI KARYA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADHI KARYA has no effect on the direction of DFS Furniture i.e., DFS Furniture and ADHI KARYA go up and down completely randomly.
Pair Corralation between DFS Furniture and ADHI KARYA
Assuming the 90 days trading horizon DFS Furniture PLC is expected to generate 0.41 times more return on investment than ADHI KARYA. However, DFS Furniture PLC is 2.46 times less risky than ADHI KARYA. It trades about 0.28 of its potential returns per unit of risk. ADHI KARYA is currently generating about -0.12 per unit of risk. If you would invest 151.00 in DFS Furniture PLC on September 12, 2024 and sell it today you would earn a total of 15.00 from holding DFS Furniture PLC or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFS Furniture PLC vs. ADHI KARYA
Performance |
| Timeline |
| DFS Furniture PLC |
| ADHI KARYA |
DFS Furniture and ADHI KARYA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and ADHI KARYA
The main advantage of trading using opposite DFS Furniture and ADHI KARYA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture position performs unexpectedly, ADHI KARYA 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 ADHI KARYA will offset losses from the drop in ADHI KARYA's long position.| DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc |
| ADHI KARYA vs. SLR Investment Corp | ADHI KARYA vs. Tradegate AG Wertpapierhandelsbank | ADHI KARYA vs. Regions Financial | ADHI KARYA vs. Commonwealth Bank of |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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