Correlation Between Dometic Group and XMReality
Can any of the company-specific risk be diversified away by investing in both Dometic Group and XMReality 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 XMReality 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 XMReality AB, you can compare the effects of market volatilities on Dometic Group and XMReality 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 XMReality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dometic Group and XMReality.
Diversification Opportunities for Dometic Group and XMReality
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dometic and XMReality is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Dometic Group AB and XMReality AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XMReality 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 XMReality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XMReality AB has no effect on the direction of Dometic Group i.e., Dometic Group and XMReality go up and down completely randomly.
Pair Corralation between Dometic Group and XMReality
Assuming the 90 days trading horizon Dometic Group AB is expected to under-perform the XMReality. But the stock apears to be less risky and, when comparing its historical volatility, Dometic Group AB is 2.48 times less risky than XMReality. The stock trades about -0.02 of its potential returns per unit of risk. The XMReality AB is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1.50 in XMReality AB on November 27, 2024 and sell it today you would earn a total of 0.15 from holding XMReality AB or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dometic Group AB vs. XMReality AB
Performance |
| Timeline |
| Dometic Group AB |
| XMReality AB |
Dometic Group and XMReality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dometic Group and XMReality
The main advantage of trading using opposite Dometic Group and XMReality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dometic Group position performs unexpectedly, XMReality 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 XMReality will offset losses from the drop in XMReality's long position.| Dometic Group vs. Thule Group AB | Dometic Group vs. Husqvarna AB | Dometic Group vs. Trelleborg AB | Dometic Group vs. Essity AB |
| XMReality vs. Tangiamo Touch Technology | XMReality vs. Zaplox AB | XMReality vs. Alligator Bioscience AB | XMReality vs. Garo 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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