Correlation Between DFDS AS and First Farms
Can any of the company-specific risk be diversified away by investing in both DFDS AS and First Farms 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 DFDS AS and First Farms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFDS AS and First Farms AS, you can compare the effects of market volatilities on DFDS AS and First Farms 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 DFDS AS with a short position of First Farms. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFDS AS and First Farms.
Diversification Opportunities for DFDS AS and First Farms
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DFDS and First is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding DFDS AS and First Farms AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Farms AS and DFDS AS 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 DFDS AS are associated (or correlated) with First Farms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Farms AS has no effect on the direction of DFDS AS i.e., DFDS AS and First Farms go up and down completely randomly.
Pair Corralation between DFDS AS and First Farms
Assuming the 90 days trading horizon DFDS AS is expected to under-perform the First Farms. In addition to that, DFDS AS is 1.55 times more volatile than First Farms AS. It trades about -0.17 of its total potential returns per unit of risk. First Farms AS is currently generating about -0.05 per unit of volatility. If you would invest 7,480 in First Farms AS on August 29, 2024 and sell it today you would lose (160.00) from holding First Farms AS or give up 2.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFDS AS vs. First Farms AS
Performance |
| Timeline |
| DFDS AS |
| First Farms AS |
DFDS AS and First Farms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFDS AS and First Farms
The main advantage of trading using opposite DFDS AS and First Farms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFDS AS position performs unexpectedly, First Farms 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 First Farms will offset losses from the drop in First Farms' long position.| DFDS AS vs. FLSmidth Co | DFDS AS vs. NKT AS | DFDS AS vs. Dampskibsselskabet Norden AS | DFDS AS vs. GN Store Nord |
| First Farms vs. HH International AS | First Farms vs. SKAKO AS | First Farms vs. Spar Nord Bank | First Farms vs. Matas AS |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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