Correlation Between Elanders and Dustin Group
Can any of the company-specific risk be diversified away by investing in both Elanders and Dustin 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 Elanders and Dustin Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elanders AB and Dustin Group AB, you can compare the effects of market volatilities on Elanders and Dustin 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 Elanders with a short position of Dustin Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elanders and Dustin Group.
Diversification Opportunities for Elanders and Dustin Group
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Elanders and Dustin is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Elanders AB and Dustin Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dustin Group AB and Elanders 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 Elanders AB are associated (or correlated) with Dustin Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dustin Group AB has no effect on the direction of Elanders i.e., Elanders and Dustin Group go up and down completely randomly.
Pair Corralation between Elanders and Dustin Group
Assuming the 90 days trading horizon Elanders AB is expected to generate 0.31 times more return on investment than Dustin Group. However, Elanders AB is 3.26 times less risky than Dustin Group. It trades about -0.2 of its potential returns per unit of risk. Dustin Group AB is currently generating about -0.39 per unit of risk. If you would invest 9,720 in Elanders AB on September 1, 2024 and sell it today you would lose (680.00) from holding Elanders AB or give up 7.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elanders AB vs. Dustin Group AB
Performance |
| Timeline |
| Elanders AB |
| Dustin Group AB |
Elanders and Dustin Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elanders and Dustin Group
The main advantage of trading using opposite Elanders and Dustin Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elanders position performs unexpectedly, Dustin 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 Dustin Group will offset losses from the drop in Dustin Group's long position.| Elanders vs. Inwido AB | Elanders vs. New Wave Group | Elanders vs. Lindab International AB | Elanders vs. Fagerhult AB |
| Dustin Group vs. Clas Ohlson AB | Dustin Group vs. Byggmax Group AB | Dustin Group vs. Inwido AB | Dustin Group vs. Dometic Group 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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