Correlation Between DFS Furniture and Trainline Plc
Can any of the company-specific risk be diversified away by investing in both DFS Furniture and Trainline 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 Trainline 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 Trainline Plc, you can compare the effects of market volatilities on DFS Furniture and Trainline 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 Trainline Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and Trainline Plc.
Diversification Opportunities for DFS Furniture and Trainline Plc
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DFS and Trainline is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC and Trainline Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trainline 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 Trainline Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trainline Plc has no effect on the direction of DFS Furniture i.e., DFS Furniture and Trainline Plc go up and down completely randomly.
Pair Corralation between DFS Furniture and Trainline Plc
Assuming the 90 days trading horizon DFS Furniture PLC is expected to generate 0.74 times more return on investment than Trainline Plc. However, DFS Furniture PLC is 1.35 times less risky than Trainline Plc. It trades about -0.03 of its potential returns per unit of risk. Trainline Plc is currently generating about -0.1 per unit of risk. If you would invest 13,900 in DFS Furniture PLC on October 30, 2024 and sell it today you would lose (440.00) from holding DFS Furniture PLC or give up 3.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFS Furniture PLC vs. Trainline Plc
Performance |
| Timeline |
| DFS Furniture PLC |
| Trainline Plc |
DFS Furniture and Trainline Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and Trainline Plc
The main advantage of trading using opposite DFS Furniture and Trainline Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture position performs unexpectedly, Trainline 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 Trainline Plc will offset losses from the drop in Trainline Plc's long position.| DFS Furniture vs. Live Nation Entertainment | DFS Furniture vs. mobilezone holding AG | DFS Furniture vs. Compagnie Plastic Omnium | DFS Furniture vs. Applied Materials |
| Trainline Plc vs. Jacquet Metal Service | Trainline Plc vs. Melia Hotels | Trainline Plc vs. Erste Group Bank | Trainline Plc vs. Nordea Bank Abp |
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.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |