Correlation Between Descartes Systems and Grab Holdings
Can any of the company-specific risk be diversified away by investing in both Descartes Systems and Grab Holdings 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 Descartes Systems and Grab Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Descartes Systems Group and Grab Holdings, you can compare the effects of market volatilities on Descartes Systems and Grab Holdings 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 Descartes Systems with a short position of Grab Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Descartes Systems and Grab Holdings.
Diversification Opportunities for Descartes Systems and Grab Holdings
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Descartes and Grab is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Descartes Systems Group and Grab Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grab Holdings and Descartes Systems 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 Descartes Systems Group are associated (or correlated) with Grab Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grab Holdings has no effect on the direction of Descartes Systems i.e., Descartes Systems and Grab Holdings go up and down completely randomly.
Pair Corralation between Descartes Systems and Grab Holdings
Given the investment horizon of 90 days Descartes Systems Group is expected to generate 0.59 times more return on investment than Grab Holdings. However, Descartes Systems Group is 1.69 times less risky than Grab Holdings. It trades about 0.09 of its potential returns per unit of risk. Grab Holdings is currently generating about -0.04 per unit of risk. If you would invest 11,350 in Descartes Systems Group on November 2, 2024 and sell it today you would earn a total of 244.00 from holding Descartes Systems Group or generate 2.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Descartes Systems Group vs. Grab Holdings
Performance |
| Timeline |
| Descartes Systems |
| Grab Holdings |
Descartes Systems and Grab Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Descartes Systems and Grab Holdings
The main advantage of trading using opposite Descartes Systems and Grab Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Descartes Systems position performs unexpectedly, Grab Holdings 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 Grab Holdings will offset losses from the drop in Grab Holdings' long position.| Descartes Systems vs. Clearwater Analytics Holdings | Descartes Systems vs. Expensify | Descartes Systems vs. Enfusion | Descartes Systems vs. Manhattan Associates |
| Grab Holdings vs. LYFT Inc | Grab Holdings vs. Kingsoft Cloud Holdings | Grab Holdings vs. AMTD Digital | Grab Holdings vs. Uber Technologies |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |