Correlation Between DFS Furniture and Marks
Can any of the company-specific risk be diversified away by investing in both DFS Furniture and Marks 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 Marks 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 Marks and Spencer, you can compare the effects of market volatilities on DFS Furniture and Marks 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 Marks. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and Marks.
Diversification Opportunities for DFS Furniture and Marks
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DFS and Marks is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC and Marks and Spencer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks and Spencer 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 Marks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks and Spencer has no effect on the direction of DFS Furniture i.e., DFS Furniture and Marks go up and down completely randomly.
Pair Corralation between DFS Furniture and Marks
Assuming the 90 days trading horizon DFS Furniture is expected to generate 1.51 times less return on investment than Marks. In addition to that, DFS Furniture is 1.26 times more volatile than Marks and Spencer. It trades about 0.03 of its total potential returns per unit of risk. Marks and Spencer is currently generating about 0.06 per unit of volatility. If you would invest 26,792 in Marks and Spencer on October 16, 2024 and sell it today you would earn a total of 6,468 from holding Marks and Spencer or generate 24.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
DFS Furniture PLC vs. Marks and Spencer
Performance |
| Timeline |
| DFS Furniture PLC |
| Marks and Spencer |
DFS Furniture and Marks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and Marks
The main advantage of trading using opposite DFS Furniture and Marks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture position performs unexpectedly, Marks 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 Marks will offset losses from the drop in Marks' long position.| DFS Furniture vs. Ubisoft Entertainment | DFS Furniture vs. Porvair plc | DFS Furniture vs. Guild Esports Plc | DFS Furniture vs. Grand Vision Media |
| Marks vs. Tetragon Financial Group | Marks vs. Dalata Hotel Group | Marks vs. Fortune Brands Home | Marks vs. DFS Furniture PLC |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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