Correlation Between Dom Development and CD PROJEKT
Can any of the company-specific risk be diversified away by investing in both Dom Development and CD PROJEKT 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 Dom Development and CD PROJEKT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dom Development SA and CD PROJEKT SA, you can compare the effects of market volatilities on Dom Development and CD PROJEKT 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 Dom Development with a short position of CD PROJEKT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dom Development and CD PROJEKT.
Diversification Opportunities for Dom Development and CD PROJEKT
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dom and CDR is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Dom Development SA and CD PROJEKT SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CD PROJEKT SA and Dom Development 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 Dom Development SA are associated (or correlated) with CD PROJEKT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CD PROJEKT SA has no effect on the direction of Dom Development i.e., Dom Development and CD PROJEKT go up and down completely randomly.
Pair Corralation between Dom Development and CD PROJEKT
Assuming the 90 days trading horizon Dom Development is expected to generate 1.48 times less return on investment than CD PROJEKT. In addition to that, Dom Development is 1.25 times more volatile than CD PROJEKT SA. It trades about 0.05 of its total potential returns per unit of risk. CD PROJEKT SA is currently generating about 0.09 per unit of volatility. If you would invest 16,100 in CD PROJEKT SA on August 28, 2024 and sell it today you would earn a total of 455.00 from holding CD PROJEKT SA or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dom Development SA vs. CD PROJEKT SA
Performance |
| Timeline |
| Dom Development SA |
| CD PROJEKT SA |
Dom Development and CD PROJEKT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dom Development and CD PROJEKT
The main advantage of trading using opposite Dom Development and CD PROJEKT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dom Development position performs unexpectedly, CD PROJEKT 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 CD PROJEKT will offset losses from the drop in CD PROJEKT's long position.| Dom Development vs. PZ Cormay SA | Dom Development vs. Enter Air SA | Dom Development vs. 3R Games SA | Dom Development vs. Gaming Factory SA |
| CD PROJEKT vs. Novita SA | CD PROJEKT vs. GI Group Poland | CD PROJEKT vs. BNP Paribas Bank | CD PROJEKT vs. Labo Print SA |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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