Correlation Between Dustin Group and Alcadon Group
Can any of the company-specific risk be diversified away by investing in both Dustin Group and Alcadon Group 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 Dustin Group and Alcadon Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dustin Group AB and Alcadon Group AB, you can compare the effects of market volatilities on Dustin Group and Alcadon Group 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 Dustin Group with a short position of Alcadon Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dustin Group and Alcadon Group.
Diversification Opportunities for Dustin Group and Alcadon Group
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dustin and Alcadon is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Dustin Group AB and Alcadon Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcadon Group AB and Dustin 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 Dustin Group AB are associated (or correlated) with Alcadon Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alcadon Group AB has no effect on the direction of Dustin Group i.e., Dustin Group and Alcadon Group go up and down completely randomly.
Pair Corralation between Dustin Group and Alcadon Group
Assuming the 90 days trading horizon Dustin Group AB is expected to under-perform the Alcadon Group. In addition to that, Dustin Group is 2.49 times more volatile than Alcadon Group AB. It trades about -0.39 of its total potential returns per unit of risk. Alcadon Group AB is currently generating about -0.21 per unit of volatility. If you would invest 3,060 in Alcadon Group AB on September 1, 2024 and sell it today you would lose (280.00) from holding Alcadon Group AB or give up 9.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dustin Group AB vs. Alcadon Group AB
Performance |
| Timeline |
| Dustin Group AB |
| Alcadon Group AB |
Dustin Group and Alcadon Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dustin Group and Alcadon Group
The main advantage of trading using opposite Dustin Group and Alcadon Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dustin Group position performs unexpectedly, Alcadon Group 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 Alcadon Group will offset losses from the drop in Alcadon Group's long position.| Dustin Group vs. Clas Ohlson AB | Dustin Group vs. Byggmax Group AB | Dustin Group vs. Inwido AB | Dustin Group vs. Dometic Group AB |
| Alcadon Group vs. DistIT AB | Alcadon Group vs. Addnode Group AB | Alcadon Group vs. Awardit AB | Alcadon Group vs. Avensia publ 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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