Correlation Between DFS Furniture and Tradegate
Can any of the company-specific risk be diversified away by investing in both DFS Furniture and Tradegate 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 Tradegate 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 Tradegate AG Wertpapierhandelsbank, you can compare the effects of market volatilities on DFS Furniture and Tradegate 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 Tradegate. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and Tradegate.
Diversification Opportunities for DFS Furniture and Tradegate
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between DFS and Tradegate is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC and Tradegate AG Wertpapierhandels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tradegate AG Wertpap 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 Tradegate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tradegate AG Wertpap has no effect on the direction of DFS Furniture i.e., DFS Furniture and Tradegate go up and down completely randomly.
Pair Corralation between DFS Furniture and Tradegate
Assuming the 90 days trading horizon DFS Furniture PLC is expected to under-perform the Tradegate. In addition to that, DFS Furniture is 7.33 times more volatile than Tradegate AG Wertpapierhandelsbank. It trades about -0.26 of its total potential returns per unit of risk. Tradegate AG Wertpapierhandelsbank is currently generating about 0.0 per unit of volatility. If you would invest 8,850 in Tradegate AG Wertpapierhandelsbank on October 30, 2024 and sell it today you would earn a total of 0.00 from holding Tradegate AG Wertpapierhandelsbank or generate 0.0% 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. Tradegate AG Wertpapierhandels
Performance |
| Timeline |
| DFS Furniture PLC |
| Tradegate AG Wertpap |
DFS Furniture and Tradegate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and Tradegate
The main advantage of trading using opposite DFS Furniture and Tradegate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture position performs unexpectedly, Tradegate 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 Tradegate will offset losses from the drop in Tradegate's long position.| DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc |
| Tradegate vs. Austevoll Seafood ASA | Tradegate vs. Brockhaus Capital Management | Tradegate vs. Jupiter Fund Management | Tradegate vs. Lery Seafood Group |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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