Correlation Between Dometic Group and Inwido AB
Can any of the company-specific risk be diversified away by investing in both Dometic Group and Inwido 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 Inwido 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 Inwido AB, you can compare the effects of market volatilities on Dometic Group and Inwido 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 Inwido AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dometic Group and Inwido AB.
Diversification Opportunities for Dometic Group and Inwido AB
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dometic and Inwido is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Dometic Group AB and Inwido AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inwido 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 Inwido AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inwido AB has no effect on the direction of Dometic Group i.e., Dometic Group and Inwido AB go up and down completely randomly.
Pair Corralation between Dometic Group and Inwido AB
Assuming the 90 days trading horizon Dometic Group AB is expected to under-perform the Inwido AB. In addition to that, Dometic Group is 1.89 times more volatile than Inwido AB. It trades about -0.16 of its total potential returns per unit of risk. Inwido AB is currently generating about -0.1 per unit of volatility. If you would invest 19,140 in Inwido AB on August 25, 2024 and sell it today you would lose (580.00) from holding Inwido AB or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dometic Group AB vs. Inwido AB
Performance |
| Timeline |
| Dometic Group AB |
| Inwido AB |
Dometic Group and Inwido AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dometic Group and Inwido AB
The main advantage of trading using opposite Dometic Group and Inwido AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dometic Group position performs unexpectedly, Inwido 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 Inwido AB will offset losses from the drop in Inwido 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 |
| Inwido AB vs. Media and Games | Inwido AB vs. Redsense Medical AB | Inwido AB vs. Corline Biomedical AB | Inwido AB vs. FormPipe Software 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |