Correlation Between Dignitana and Paxman AB
Can any of the company-specific risk be diversified away by investing in both Dignitana and Paxman 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 Paxman 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 Paxman AB, you can compare the effects of market volatilities on Dignitana and Paxman 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 Paxman AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dignitana and Paxman AB.
Diversification Opportunities for Dignitana and Paxman AB
Very weak diversification
The 3 months correlation between Dignitana and Paxman is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Dignitana AB and Paxman AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paxman 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 Paxman AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paxman AB has no effect on the direction of Dignitana i.e., Dignitana and Paxman AB go up and down completely randomly.
Pair Corralation between Dignitana and Paxman AB
Assuming the 90 days trading horizon Dignitana AB is expected to generate 2.38 times more return on investment than Paxman AB. However, Dignitana is 2.38 times more volatile than Paxman AB. It trades about 0.12 of its potential returns per unit of risk. Paxman AB is currently generating about 0.16 per unit of risk. If you would invest 88.00 in Dignitana AB on August 28, 2024 and sell it today you would earn a total of 28.00 from holding Dignitana AB or generate 31.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dignitana AB vs. Paxman AB
Performance |
| Timeline |
| Dignitana AB |
| Paxman AB |
Dignitana and Paxman AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dignitana and Paxman AB
The main advantage of trading using opposite Dignitana and Paxman AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dignitana position performs unexpectedly, Paxman 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 Paxman AB will offset losses from the drop in Paxman AB's long position.| Dignitana vs. C Rad AB | Dignitana vs. Paxman AB | Dignitana vs. Enzymatica publ AB | Dignitana vs. Episurf Medical AB |
| Paxman AB vs. Dignitana AB | Paxman AB vs. C Rad AB | Paxman AB vs. Surgical Science Sweden | Paxman AB vs. Sedana Medical 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |