Correlation Between Dignitana and Clean Motion
Can any of the company-specific risk be diversified away by investing in both Dignitana and Clean Motion 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 Dignitana and Clean Motion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dignitana AB and Clean Motion AB, you can compare the effects of market volatilities on Dignitana and Clean Motion 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 Dignitana with a short position of Clean Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dignitana and Clean Motion.
Diversification Opportunities for Dignitana and Clean Motion
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dignitana and Clean is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Dignitana AB and Clean Motion AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Motion AB and Dignitana 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 Dignitana AB are associated (or correlated) with Clean Motion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Motion AB has no effect on the direction of Dignitana i.e., Dignitana and Clean Motion go up and down completely randomly.
Pair Corralation between Dignitana and Clean Motion
Assuming the 90 days trading horizon Dignitana AB is expected to under-perform the Clean Motion. But the stock apears to be less risky and, when comparing its historical volatility, Dignitana AB is 1.15 times less risky than Clean Motion. The stock trades about -0.03 of its potential returns per unit of risk. The Clean Motion AB is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 100.00 in Clean Motion AB on August 29, 2024 and sell it today you would lose (66.00) from holding Clean Motion AB or give up 66.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dignitana AB vs. Clean Motion AB
Performance |
| Timeline |
| Dignitana AB |
| Clean Motion AB |
Dignitana and Clean Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dignitana and Clean Motion
The main advantage of trading using opposite Dignitana and Clean Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dignitana position performs unexpectedly, Clean Motion 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 Clean Motion will offset losses from the drop in Clean Motion's long position.| Dignitana vs. C Rad AB | Dignitana vs. Paxman AB | Dignitana vs. Enzymatica publ AB | Dignitana vs. Episurf Medical AB |
| Clean Motion vs. Doxa AB | Clean Motion vs. Cortus Energy AB | Clean Motion vs. Online Brands Nordic | Clean Motion vs. NetJobs Group AB |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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