Correlation Between Dometic Group and Getinge AB
Can any of the company-specific risk be diversified away by investing in both Dometic Group and Getinge 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 Getinge 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 Getinge AB ser, you can compare the effects of market volatilities on Dometic Group and Getinge 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 Getinge AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dometic Group and Getinge AB.
Diversification Opportunities for Dometic Group and Getinge AB
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dometic and Getinge is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Dometic Group AB and Getinge AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getinge AB ser 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 Getinge AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getinge AB ser has no effect on the direction of Dometic Group i.e., Dometic Group and Getinge AB go up and down completely randomly.
Pair Corralation between Dometic Group and Getinge AB
Assuming the 90 days trading horizon Dometic Group AB is expected to under-perform the Getinge AB. But the stock apears to be less risky and, when comparing its historical volatility, Dometic Group AB is 1.08 times less risky than Getinge AB. The stock trades about -0.07 of its potential returns per unit of risk. The Getinge AB ser is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 22,671 in Getinge AB ser on September 2, 2024 and sell it today you would lose (5,626) from holding Getinge AB ser or give up 24.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dometic Group AB vs. Getinge AB ser
Performance |
| Timeline |
| Dometic Group AB |
| Getinge AB ser |
Dometic Group and Getinge AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dometic Group and Getinge AB
The main advantage of trading using opposite Dometic Group and Getinge AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dometic Group position performs unexpectedly, Getinge 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 Getinge AB will offset losses from the drop in Getinge AB's long position.| Dometic Group vs. AB SKF | Dometic Group vs. Tele2 AB | Dometic Group vs. Sandvik AB | Dometic Group vs. Skanska 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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