Correlation Between DFDS AS and North Media
Can any of the company-specific risk be diversified away by investing in both DFDS AS and North Media 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 North Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFDS AS and North Media AS, you can compare the effects of market volatilities on DFDS AS and North Media 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 North Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFDS AS and North Media.
Diversification Opportunities for DFDS AS and North Media
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between DFDS and North is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding DFDS AS and North Media AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Media 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 North Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Media AS has no effect on the direction of DFDS AS i.e., DFDS AS and North Media go up and down completely randomly.
Pair Corralation between DFDS AS and North Media
Assuming the 90 days trading horizon DFDS AS is expected to under-perform the North Media. But the stock apears to be less risky and, when comparing its historical volatility, DFDS AS is 1.08 times less risky than North Media. The stock trades about -0.07 of its potential returns per unit of risk. The North Media AS is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 5,730 in North Media AS on August 25, 2024 and sell it today you would lose (670.00) from holding North Media AS or give up 11.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFDS AS vs. North Media AS
Performance |
| Timeline |
| DFDS AS |
| North Media AS |
DFDS AS and North Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFDS AS and North Media
The main advantage of trading using opposite DFDS AS and North Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFDS AS position performs unexpectedly, North Media 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 North Media will offset losses from the drop in North Media's long position.| DFDS AS vs. North Media AS | DFDS AS vs. HH International AS | DFDS AS vs. Per Aarsleff Holding | DFDS AS vs. First Farms AS |
| North Media vs. Matas AS | North Media vs. cBrain AS | North Media vs. Alm Brand | North Media vs. Netcompany Group 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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