Correlation Between Dometic Group and Arjo AB
Can any of the company-specific risk be diversified away by investing in both Dometic Group and Arjo 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 Dometic Group and Arjo AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dometic Group AB and Arjo AB, you can compare the effects of market volatilities on Dometic Group and Arjo 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 Dometic Group with a short position of Arjo AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dometic Group and Arjo AB.
Diversification Opportunities for Dometic Group and Arjo AB
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dometic and Arjo is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Dometic Group AB and Arjo AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arjo AB and Dometic 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 Dometic Group AB are associated (or correlated) with Arjo AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arjo AB has no effect on the direction of Dometic Group i.e., Dometic Group and Arjo AB go up and down completely randomly.
Pair Corralation between Dometic Group and Arjo AB
Assuming the 90 days trading horizon Dometic Group AB is expected to under-perform the Arjo AB. In addition to that, Dometic Group is 1.06 times more volatile than Arjo AB. It trades about -0.02 of its total potential returns per unit of risk. Arjo AB is currently generating about 0.0 per unit of volatility. If you would invest 3,827 in Arjo AB on August 31, 2024 and sell it today you would lose (397.00) from holding Arjo AB or give up 10.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Dometic Group AB vs. Arjo AB
Performance |
| Timeline |
| Dometic Group AB |
| Arjo AB |
Dometic Group and Arjo AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dometic Group and Arjo AB
The main advantage of trading using opposite Dometic Group and Arjo AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dometic Group position performs unexpectedly, Arjo 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 Arjo AB will offset losses from the drop in Arjo AB's long position.| Dometic Group vs. Thule Group AB | Dometic Group vs. Husqvarna AB | Dometic Group vs. Trelleborg AB | Dometic Group vs. Essity 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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