Correlation Between Focus Universal and DSG Global
Can any of the company-specific risk be diversified away by investing in both Focus Universal and DSG Global 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 Focus Universal and DSG Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Universal and DSG Global, you can compare the effects of market volatilities on Focus Universal and DSG Global 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 Focus Universal with a short position of DSG Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Universal and DSG Global.
Diversification Opportunities for Focus Universal and DSG Global
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Focus and DSG is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Focus Universal and DSG Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSG Global and Focus Universal 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 Focus Universal are associated (or correlated) with DSG Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSG Global has no effect on the direction of Focus Universal i.e., Focus Universal and DSG Global go up and down completely randomly.
Pair Corralation between Focus Universal and DSG Global
Given the investment horizon of 90 days Focus Universal is expected to under-perform the DSG Global. But the stock apears to be less risky and, when comparing its historical volatility, Focus Universal is 55.32 times less risky than DSG Global. The stock trades about -0.03 of its potential returns per unit of risk. The DSG Global is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 0.01 in DSG Global on August 28, 2024 and sell it today you would earn a total of 0.00 from holding DSG Global or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Universal vs. DSG Global
Performance |
| Timeline |
| Focus Universal |
| DSG Global |
Focus Universal and DSG Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Universal and DSG Global
The main advantage of trading using opposite Focus Universal and DSG Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Universal position performs unexpectedly, DSG Global 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 DSG Global will offset losses from the drop in DSG Global's long position.| Focus Universal vs. ESCO Technologies | Focus Universal vs. Genasys | Focus Universal vs. Cepton Inc | Focus Universal vs. Darkpulse |
| DSG Global vs. Garmin | DSG Global vs. Keysight Technologies | DSG Global vs. Fortive Corp | DSG Global vs. Teledyne Technologies Incorporated |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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