Correlation Between Dignitana and Doxa AB
Can any of the company-specific risk be diversified away by investing in both Dignitana and Doxa AB 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 Doxa AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dignitana AB and Doxa AB, you can compare the effects of market volatilities on Dignitana and Doxa AB 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 Doxa AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dignitana and Doxa AB.
Diversification Opportunities for Dignitana and Doxa AB
Very good diversification
The 3 months correlation between Dignitana and Doxa is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Dignitana AB and Doxa AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doxa 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 Doxa AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doxa AB has no effect on the direction of Dignitana i.e., Dignitana and Doxa AB go up and down completely randomly.
Pair Corralation between Dignitana and Doxa AB
Assuming the 90 days trading horizon Dignitana AB is expected to generate 1.63 times more return on investment than Doxa AB. However, Dignitana is 1.63 times more volatile than Doxa AB. It trades about -0.03 of its potential returns per unit of risk. Doxa AB is currently generating about -0.08 per unit of risk. If you would invest 561.00 in Dignitana AB on August 26, 2024 and sell it today you would lose (442.00) from holding Dignitana AB or give up 78.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dignitana AB vs. Doxa AB
Performance |
| Timeline |
| Dignitana AB |
| Doxa AB |
Dignitana and Doxa AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dignitana and Doxa AB
The main advantage of trading using opposite Dignitana and Doxa AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dignitana position performs unexpectedly, Doxa AB 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 Doxa AB will offset losses from the drop in Doxa AB's long position.| Dignitana vs. C Rad AB | Dignitana vs. Paxman AB | Dignitana vs. Enzymatica publ AB | Dignitana vs. Episurf Medical AB |
| Doxa AB vs. Mantex AB | Doxa AB vs. Genovis AB | Doxa AB vs. Vestum AB | Doxa AB vs. Karolinska Development 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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