Correlation Between DFS Furniture and Infrastrutture Wireless
Can any of the company-specific risk be diversified away by investing in both DFS Furniture and Infrastrutture Wireless 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 Infrastrutture Wireless 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 Infrastrutture Wireless Italiane, you can compare the effects of market volatilities on DFS Furniture and Infrastrutture Wireless 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 Infrastrutture Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and Infrastrutture Wireless.
Diversification Opportunities for DFS Furniture and Infrastrutture Wireless
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DFS and Infrastrutture is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC and Infrastrutture Wireless Italia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infrastrutture Wireless 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 Infrastrutture Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infrastrutture Wireless has no effect on the direction of DFS Furniture i.e., DFS Furniture and Infrastrutture Wireless go up and down completely randomly.
Pair Corralation between DFS Furniture and Infrastrutture Wireless
Assuming the 90 days trading horizon DFS Furniture PLC is expected to generate 2.16 times more return on investment than Infrastrutture Wireless. However, DFS Furniture is 2.16 times more volatile than Infrastrutture Wireless Italiane. It trades about 0.06 of its potential returns per unit of risk. Infrastrutture Wireless Italiane is currently generating about -0.04 per unit of risk. If you would invest 10,892 in DFS Furniture PLC on September 3, 2024 and sell it today you would earn a total of 3,108 from holding DFS Furniture PLC or generate 28.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFS Furniture PLC vs. Infrastrutture Wireless Italia
Performance |
| Timeline |
| DFS Furniture PLC |
| Infrastrutture Wireless |
DFS Furniture and Infrastrutture Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and Infrastrutture Wireless
The main advantage of trading using opposite DFS Furniture and Infrastrutture Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture position performs unexpectedly, Infrastrutture Wireless 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 Infrastrutture Wireless will offset losses from the drop in Infrastrutture Wireless' long position.| DFS Furniture vs. Rockfire Resources plc | DFS Furniture vs. Tlou Energy | DFS Furniture vs. Falcon Oil Gas | DFS Furniture vs. Helium One Global |
| Infrastrutture Wireless vs. Catalyst Media Group | Infrastrutture Wireless vs. CATLIN GROUP | Infrastrutture Wireless vs. RTW Venture Fund | Infrastrutture Wireless vs. Secure Property Development |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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