Correlation Between DFDS AS and Schouw
Can any of the company-specific risk be diversified away by investing in both DFDS AS and Schouw 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 Schouw into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFDS AS and Schouw Co, you can compare the effects of market volatilities on DFDS AS and Schouw 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 Schouw. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFDS AS and Schouw.
Diversification Opportunities for DFDS AS and Schouw
Weak diversification
The 3 months correlation between DFDS and Schouw is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding DFDS AS and Schouw Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schouw 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 Schouw. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schouw has no effect on the direction of DFDS AS i.e., DFDS AS and Schouw go up and down completely randomly.
Pair Corralation between DFDS AS and Schouw
Assuming the 90 days trading horizon DFDS AS is expected to under-perform the Schouw. In addition to that, DFDS AS is 1.8 times more volatile than Schouw Co. It trades about -0.12 of its total potential returns per unit of risk. Schouw Co is currently generating about 0.01 per unit of volatility. If you would invest 54,500 in Schouw Co on November 5, 2024 and sell it today you would earn a total of 1,400 from holding Schouw Co or generate 2.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFDS AS vs. Schouw Co
Performance |
| Timeline |
| DFDS AS |
| Schouw |
DFDS AS and Schouw Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFDS AS and Schouw
The main advantage of trading using opposite DFDS AS and Schouw positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFDS AS position performs unexpectedly, Schouw 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 Schouw will offset losses from the drop in Schouw's long position.| DFDS AS vs. FLSmidth Co | DFDS AS vs. NKT AS | DFDS AS vs. Dampskibsselskabet Norden AS | DFDS AS vs. GN Store Nord |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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