Correlation Between DIeteren Group and USS
Can any of the company-specific risk be diversified away by investing in both DIeteren Group and USS 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 DIeteren Group and USS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DIeteren Group SA and USS Co, you can compare the effects of market volatilities on DIeteren Group and USS 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 DIeteren Group with a short position of USS. Check out your portfolio center. Please also check ongoing floating volatility patterns of DIeteren Group and USS.
Diversification Opportunities for DIeteren Group and USS
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DIeteren and USS is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding DIeteren Group SA and USS Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USS Co and DIeteren Group 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 DIeteren Group SA are associated (or correlated) with USS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USS Co has no effect on the direction of DIeteren Group i.e., DIeteren Group and USS go up and down completely randomly.
Pair Corralation between DIeteren Group and USS
Assuming the 90 days trading horizon DIeteren Group SA is expected to generate 1.28 times more return on investment than USS. However, DIeteren Group is 1.28 times more volatile than USS Co. It trades about 0.05 of its potential returns per unit of risk. USS Co is currently generating about 0.02 per unit of risk. If you would invest 11,125 in DIeteren Group SA on September 24, 2024 and sell it today you would earn a total of 5,115 from holding DIeteren Group SA or generate 45.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DIeteren Group SA vs. USS Co
Performance |
| Timeline |
| DIeteren Group SA |
| USS Co |
DIeteren Group and USS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DIeteren Group and USS
The main advantage of trading using opposite DIeteren Group and USS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DIeteren Group position performs unexpectedly, USS 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 USS will offset losses from the drop in USS's long position.| DIeteren Group vs. Copart Inc | DIeteren Group vs. Zhongsheng Group Holdings | DIeteren Group vs. CarMax Inc | DIeteren Group vs. Penske Automotive Group |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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