Correlation Between DFS Furniture and Antofagasta PLC
Can any of the company-specific risk be diversified away by investing in both DFS Furniture and Antofagasta PLC 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 Antofagasta PLC 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 Antofagasta PLC, you can compare the effects of market volatilities on DFS Furniture and Antofagasta PLC 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 Antofagasta PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and Antofagasta PLC.
Diversification Opportunities for DFS Furniture and Antofagasta PLC
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DFS and Antofagasta is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC and Antofagasta PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antofagasta PLC 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 Antofagasta PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antofagasta PLC has no effect on the direction of DFS Furniture i.e., DFS Furniture and Antofagasta PLC go up and down completely randomly.
Pair Corralation between DFS Furniture and Antofagasta PLC
Assuming the 90 days trading horizon DFS Furniture is expected to generate 2.23 times less return on investment than Antofagasta PLC. In addition to that, DFS Furniture is 1.02 times more volatile than Antofagasta PLC. It trades about 0.01 of its total potential returns per unit of risk. Antofagasta PLC is currently generating about 0.01 per unit of volatility. If you would invest 156,132 in Antofagasta PLC on September 23, 2024 and sell it today you would earn a total of 5,218 from holding Antofagasta PLC or generate 3.34% 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. Antofagasta PLC
Performance |
| Timeline |
| DFS Furniture PLC |
| Antofagasta PLC |
DFS Furniture and Antofagasta PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and Antofagasta PLC
The main advantage of trading using opposite DFS Furniture and Antofagasta PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture position performs unexpectedly, Antofagasta PLC 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 Antofagasta PLC will offset losses from the drop in Antofagasta PLC's long position.| DFS Furniture vs. Broadridge Financial Solutions | DFS Furniture vs. JB Hunt Transport | DFS Furniture vs. Bankers Investment Trust | DFS Furniture vs. Roadside Real Estate |
| Antofagasta PLC vs. Virgin Wines UK | Antofagasta PLC vs. DFS Furniture PLC | Antofagasta PLC vs. Universal Display Corp | Antofagasta PLC vs. Home Depot |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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