Correlation Between DFS Furniture and LION ONE
Can any of the company-specific risk be diversified away by investing in both DFS Furniture and LION ONE 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 LION ONE 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 LION ONE METALS, you can compare the effects of market volatilities on DFS Furniture and LION ONE 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 LION ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and LION ONE.
Diversification Opportunities for DFS Furniture and LION ONE
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between DFS and LION is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC and LION ONE METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LION ONE METALS 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 LION ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LION ONE METALS has no effect on the direction of DFS Furniture i.e., DFS Furniture and LION ONE go up and down completely randomly.
Pair Corralation between DFS Furniture and LION ONE
Assuming the 90 days trading horizon DFS Furniture PLC is expected to generate 0.35 times more return on investment than LION ONE. However, DFS Furniture PLC is 2.84 times less risky than LION ONE. It trades about 0.28 of its potential returns per unit of risk. LION ONE METALS is currently generating about -0.15 per unit of risk. If you would invest 151.00 in DFS Furniture PLC on September 13, 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFS Furniture PLC vs. LION ONE METALS
Performance |
| Timeline |
| DFS Furniture PLC |
| LION ONE METALS |
DFS Furniture and LION ONE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and LION ONE
The main advantage of trading using opposite DFS Furniture and LION ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture position performs unexpectedly, LION ONE 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 LION ONE will offset losses from the drop in LION ONE's long position.| DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |