Correlation Between Din Capital and Van Dien

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Can any of the company-specific risk be diversified away by investing in both Din Capital and Van Dien 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 Din Capital and Van Dien into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Din Capital Investment and Van Dien Fused, you can compare the effects of market volatilities on Din Capital and Van Dien 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 Din Capital with a short position of Van Dien. Check out your portfolio center. Please also check ongoing floating volatility patterns of Din Capital and Van Dien.

Diversification Opportunities for Din Capital and Van Dien

0.57
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Din and Van is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Din Capital Investment and Van Dien Fused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Van Dien Fused and Din Capital 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 Din Capital Investment are associated (or correlated) with Van Dien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Van Dien Fused has no effect on the direction of Din Capital i.e., Din Capital and Van Dien go up and down completely randomly.

Pair Corralation between Din Capital and Van Dien

Assuming the 90 days trading horizon Din Capital is expected to generate 1.4 times less return on investment than Van Dien. But when comparing it to its historical volatility, Din Capital Investment is 1.39 times less risky than Van Dien. It trades about 0.04 of its potential returns per unit of risk. Van Dien Fused is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,140,261  in Van Dien Fused on September 14, 2024 and sell it today you would earn a total of  189,739  from holding Van Dien Fused or generate 16.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy79.56%
ValuesDaily Returns

Din Capital Investment  vs.  Van Dien Fused

 Performance 
       Timeline  
Din Capital Investment 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Din Capital Investment are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, Din Capital displayed solid returns over the last few months and may actually be approaching a breakup point.
Van Dien Fused 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Van Dien Fused has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Van Dien is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Din Capital and Van Dien Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Din Capital and Van Dien

The main advantage of trading using opposite Din Capital and Van Dien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Din Capital position performs unexpectedly, Van Dien 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 Van Dien will offset losses from the drop in Van Dien's long position.
The idea behind Din Capital Investment and Van Dien Fused pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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