Correlation Between Douglas Dynamics and Continental Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both Douglas Dynamics and Continental Aktiengesellscha 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 Douglas Dynamics and Continental Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Douglas Dynamics and Continental Aktiengesellschaft, you can compare the effects of market volatilities on Douglas Dynamics and Continental Aktiengesellscha 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 Douglas Dynamics with a short position of Continental Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Douglas Dynamics and Continental Aktiengesellscha.
Diversification Opportunities for Douglas Dynamics and Continental Aktiengesellscha
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Douglas and Continental is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Douglas Dynamics and Continental Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Continental Aktiengesellscha and Douglas Dynamics 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 Douglas Dynamics are associated (or correlated) with Continental Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Continental Aktiengesellscha has no effect on the direction of Douglas Dynamics i.e., Douglas Dynamics and Continental Aktiengesellscha go up and down completely randomly.
Pair Corralation between Douglas Dynamics and Continental Aktiengesellscha
Given the investment horizon of 90 days Douglas Dynamics is expected to generate 0.57 times more return on investment than Continental Aktiengesellscha. However, Douglas Dynamics is 1.75 times less risky than Continental Aktiengesellscha. It trades about 0.29 of its potential returns per unit of risk. Continental Aktiengesellschaft is currently generating about 0.14 per unit of risk. If you would invest 2,369 in Douglas Dynamics on November 3, 2024 and sell it today you would earn a total of 216.00 from holding Douglas Dynamics or generate 9.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Douglas Dynamics vs. Continental Aktiengesellschaft
Performance |
| Timeline |
| Douglas Dynamics |
| Continental Aktiengesellscha |
Douglas Dynamics and Continental Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Douglas Dynamics and Continental Aktiengesellscha
The main advantage of trading using opposite Douglas Dynamics and Continental Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Douglas Dynamics position performs unexpectedly, Continental Aktiengesellscha 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 Continental Aktiengesellscha will offset losses from the drop in Continental Aktiengesellscha's long position.| Douglas Dynamics vs. Monro Muffler Brake | Douglas Dynamics vs. Motorcar Parts of | Douglas Dynamics vs. Standard Motor Products | Douglas Dynamics vs. Stoneridge |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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