Correlation Between Penneo AS and Dataproces Group
Can any of the company-specific risk be diversified away by investing in both Penneo AS and Dataproces 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 Penneo AS and Dataproces Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Penneo AS and Dataproces Group AS, you can compare the effects of market volatilities on Penneo AS and Dataproces 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 Penneo AS with a short position of Dataproces Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penneo AS and Dataproces Group.
Diversification Opportunities for Penneo AS and Dataproces Group
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Penneo and Dataproces is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Penneo AS and Dataproces Group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dataproces Group and Penneo AS 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 Penneo AS are associated (or correlated) with Dataproces Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dataproces Group has no effect on the direction of Penneo AS i.e., Penneo AS and Dataproces Group go up and down completely randomly.
Pair Corralation between Penneo AS and Dataproces Group
Assuming the 90 days trading horizon Penneo AS is expected to generate 0.63 times more return on investment than Dataproces Group. However, Penneo AS is 1.59 times less risky than Dataproces Group. It trades about -0.04 of its potential returns per unit of risk. Dataproces Group AS is currently generating about -0.04 per unit of risk. If you would invest 818.00 in Penneo AS on August 29, 2024 and sell it today you would lose (18.00) from holding Penneo AS or give up 2.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penneo AS vs. Dataproces Group AS
Performance |
| Timeline |
| Penneo AS |
| Dataproces Group |
Penneo AS and Dataproces Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penneo AS and Dataproces Group
The main advantage of trading using opposite Penneo AS and Dataproces Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penneo AS position performs unexpectedly, Dataproces 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 Dataproces Group will offset losses from the drop in Dataproces Group's long position.The idea behind Penneo AS and Dataproces Group AS 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.| Dataproces Group vs. Penneo AS | Dataproces Group vs. Bactiquant AS | Dataproces Group vs. cBrain AS | Dataproces Group vs. FOM Technologies AS |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |