Correlation Between Dustin Group and Addnode Group
Can any of the company-specific risk be diversified away by investing in both Dustin Group and Addnode 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 Addnode 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 Addnode Group AB, you can compare the effects of market volatilities on Dustin Group and Addnode 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 Addnode Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dustin Group and Addnode Group.
Diversification Opportunities for Dustin Group and Addnode Group
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dustin and Addnode is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Dustin Group AB and Addnode Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addnode 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 Addnode Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addnode Group AB has no effect on the direction of Dustin Group i.e., Dustin Group and Addnode Group go up and down completely randomly.
Pair Corralation between Dustin Group and Addnode Group
Assuming the 90 days trading horizon Dustin Group AB is expected to under-perform the Addnode Group. In addition to that, Dustin Group is 1.03 times more volatile than Addnode Group AB. It trades about -0.03 of its total potential returns per unit of risk. Addnode Group AB is currently generating about 0.22 per unit of volatility. If you would invest 10,080 in Addnode Group AB on November 5, 2024 and sell it today you would earn a total of 1,730 from holding Addnode Group AB or generate 17.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dustin Group AB vs. Addnode Group AB
Performance |
| Timeline |
| Dustin Group AB |
| Addnode Group AB |
Dustin Group and Addnode Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dustin Group and Addnode Group
The main advantage of trading using opposite Dustin Group and Addnode Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dustin Group position performs unexpectedly, Addnode 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 Addnode Group will offset losses from the drop in Addnode 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 |
| Addnode Group vs. Lagercrantz Group AB | Addnode Group vs. Addtech AB | Addnode Group vs. Vitec Software Group | Addnode Group vs. AddLife 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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