Correlation Between Dometic Group and Powercell Sweden
Can any of the company-specific risk be diversified away by investing in both Dometic Group and Powercell Sweden 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 Powercell Sweden 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 Powercell Sweden, you can compare the effects of market volatilities on Dometic Group and Powercell Sweden 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 Powercell Sweden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dometic Group and Powercell Sweden.
Diversification Opportunities for Dometic Group and Powercell Sweden
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dometic and Powercell is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Dometic Group AB and Powercell Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powercell Sweden 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 Powercell Sweden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powercell Sweden has no effect on the direction of Dometic Group i.e., Dometic Group and Powercell Sweden go up and down completely randomly.
Pair Corralation between Dometic Group and Powercell Sweden
Assuming the 90 days trading horizon Dometic Group AB is expected to under-perform the Powercell Sweden. But the stock apears to be less risky and, when comparing its historical volatility, Dometic Group AB is 2.18 times less risky than Powercell Sweden. The stock trades about -0.11 of its potential returns per unit of risk. The Powercell Sweden is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3,974 in Powercell Sweden on September 1, 2024 and sell it today you would lose (378.00) from holding Powercell Sweden or give up 9.51% 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. Powercell Sweden
Performance |
| Timeline |
| Dometic Group AB |
| Powercell Sweden |
Dometic Group and Powercell Sweden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dometic Group and Powercell Sweden
The main advantage of trading using opposite Dometic Group and Powercell Sweden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dometic Group position performs unexpectedly, Powercell Sweden 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 Powercell Sweden will offset losses from the drop in Powercell Sweden'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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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