Correlation Between DFS Furniture and Vastned Retail
Can any of the company-specific risk be diversified away by investing in both DFS Furniture and Vastned Retail 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 Vastned Retail 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 Vastned Retail NV, you can compare the effects of market volatilities on DFS Furniture and Vastned Retail 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 Vastned Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and Vastned Retail.
Diversification Opportunities for DFS Furniture and Vastned Retail
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DFS and Vastned is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC and Vastned Retail NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vastned Retail NV 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 Vastned Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vastned Retail NV has no effect on the direction of DFS Furniture i.e., DFS Furniture and Vastned Retail go up and down completely randomly.
Pair Corralation between DFS Furniture and Vastned Retail
Assuming the 90 days trading horizon DFS Furniture PLC is expected to generate 2.42 times more return on investment than Vastned Retail. However, DFS Furniture is 2.42 times more volatile than Vastned Retail NV. It trades about 0.06 of its potential returns per unit of risk. Vastned Retail NV is currently generating about 0.1 per unit of risk. If you would invest 121.00 in DFS Furniture PLC on September 2, 2024 and sell it today you would earn a total of 41.00 from holding DFS Furniture PLC or generate 33.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFS Furniture PLC vs. Vastned Retail NV
Performance |
| Timeline |
| DFS Furniture PLC |
| Vastned Retail NV |
DFS Furniture and Vastned Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and Vastned Retail
The main advantage of trading using opposite DFS Furniture and Vastned Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture position performs unexpectedly, Vastned Retail 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 Vastned Retail will offset losses from the drop in Vastned Retail's long position.| DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc |
| Vastned Retail vs. Superior Plus Corp | Vastned Retail vs. NMI Holdings | Vastned Retail vs. Origin Agritech | Vastned Retail 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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