Correlation Between Impax Asset and DFS Furniture
Can any of the company-specific risk be diversified away by investing in both Impax Asset and DFS Furniture 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 Impax Asset and DFS Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impax Asset Management and DFS Furniture PLC, you can compare the effects of market volatilities on Impax Asset and DFS Furniture 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 Impax Asset with a short position of DFS Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Asset and DFS Furniture.
Diversification Opportunities for Impax Asset and DFS Furniture
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Impax and DFS is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Impax Asset Management and DFS Furniture PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFS Furniture PLC and Impax Asset 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 Impax Asset Management are associated (or correlated) with DFS Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFS Furniture PLC has no effect on the direction of Impax Asset i.e., Impax Asset and DFS Furniture go up and down completely randomly.
Pair Corralation between Impax Asset and DFS Furniture
Assuming the 90 days trading horizon Impax Asset Management is expected to under-perform the DFS Furniture. In addition to that, Impax Asset is 1.12 times more volatile than DFS Furniture PLC. It trades about -0.23 of its total potential returns per unit of risk. DFS Furniture PLC is currently generating about -0.08 per unit of volatility. If you would invest 14,000 in DFS Furniture PLC on November 6, 2024 and sell it today you would lose (580.00) from holding DFS Furniture PLC or give up 4.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impax Asset Management vs. DFS Furniture PLC
Performance |
| Timeline |
| Impax Asset Management |
| DFS Furniture PLC |
Impax Asset and DFS Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impax Asset and DFS Furniture
The main advantage of trading using opposite Impax Asset and DFS Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Asset position performs unexpectedly, DFS Furniture 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 DFS Furniture will offset losses from the drop in DFS Furniture's long position.| Impax Asset vs. ImmuPharma PLC | Impax Asset vs. Intuitive Investments Group | Impax Asset vs. European Metals Holdings | Impax Asset vs. Calculus VCT plc |
| DFS Furniture vs. FC Investment Trust | DFS Furniture vs. Vietnam Enterprise Investments | DFS Furniture vs. Kinnevik Investment AB | DFS Furniture vs. OneSavings Bank PLC |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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