Correlation Between Power Assets and DBS Group
Can any of the company-specific risk be diversified away by investing in both Power Assets and DBS 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 Power Assets and DBS Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Assets Holdings and DBS Group Holdings, you can compare the effects of market volatilities on Power Assets and DBS 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 Power Assets with a short position of DBS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Assets and DBS Group.
Diversification Opportunities for Power Assets and DBS Group
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Power and DBS is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Power Assets Holdings and DBS Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBS Group Holdings and Power Assets 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 Power Assets Holdings are associated (or correlated) with DBS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBS Group Holdings has no effect on the direction of Power Assets i.e., Power Assets and DBS Group go up and down completely randomly.
Pair Corralation between Power Assets and DBS Group
Assuming the 90 days horizon Power Assets Holdings is expected to under-perform the DBS Group. But the pink sheet apears to be less risky and, when comparing its historical volatility, Power Assets Holdings is 1.76 times less risky than DBS Group. The pink sheet trades about -0.12 of its potential returns per unit of risk. The DBS Group Holdings is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 11,668 in DBS Group Holdings on August 30, 2024 and sell it today you would earn a total of 802.00 from holding DBS Group Holdings or generate 6.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Power Assets Holdings vs. DBS Group Holdings
Performance |
| Timeline |
| Power Assets Holdings |
| DBS Group Holdings |
Power Assets and DBS Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Assets and DBS Group
The main advantage of trading using opposite Power Assets and DBS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Assets position performs unexpectedly, DBS 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 DBS Group will offset losses from the drop in DBS Group's long position.| Power Assets vs. TransAlta Corp | Power Assets vs. Pampa Energia SA | Power Assets vs. Vistra Energy Corp | Power Assets vs. NRG Energy |
| DBS Group vs. KBC Groep NV | DBS Group vs. United Overseas Bank | DBS Group vs. Embassy Bancorp | DBS Group vs. Overseas Chinese Banking |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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