Correlation Between Dometic Group and Cloetta AB
Can any of the company-specific risk be diversified away by investing in both Dometic Group and Cloetta 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 Cloetta 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 Cloetta AB, you can compare the effects of market volatilities on Dometic Group and Cloetta 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 Cloetta AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dometic Group and Cloetta AB.
Diversification Opportunities for Dometic Group and Cloetta AB
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dometic and Cloetta is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Dometic Group AB and Cloetta AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloetta 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 Cloetta AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloetta AB has no effect on the direction of Dometic Group i.e., Dometic Group and Cloetta AB go up and down completely randomly.
Pair Corralation between Dometic Group and Cloetta AB
Assuming the 90 days trading horizon Dometic Group AB is expected to under-perform the Cloetta AB. In addition to that, Dometic Group is 2.57 times more volatile than Cloetta AB. It trades about -0.13 of its total potential returns per unit of risk. Cloetta AB is currently generating about -0.27 per unit of volatility. If you would invest 2,732 in Cloetta AB on August 29, 2024 and sell it today you would lose (160.00) from holding Cloetta AB or give up 5.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dometic Group AB vs. Cloetta AB
Performance |
| Timeline |
| Dometic Group AB |
| Cloetta AB |
Dometic Group and Cloetta AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dometic Group and Cloetta AB
The main advantage of trading using opposite Dometic Group and Cloetta AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dometic Group position performs unexpectedly, Cloetta 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 Cloetta AB will offset losses from the drop in Cloetta AB's long position.| Dometic Group vs. Precise Biometrics AB | Dometic Group vs. Anoto Group AB | Dometic Group vs. Bong AB | Dometic Group vs. Episurf Medical AB |
| Cloetta AB vs. Securitas AB | Cloetta AB vs. Clas Ohlson AB | Cloetta AB vs. Axfood AB | Cloetta AB vs. Byggmax 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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