Correlation Between Prodways Group and DBT SA
Can any of the company-specific risk be diversified away by investing in both Prodways Group and DBT SA 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 Prodways Group and DBT SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prodways Group SA and DBT SA, you can compare the effects of market volatilities on Prodways Group and DBT SA 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 Prodways Group with a short position of DBT SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prodways Group and DBT SA.
Diversification Opportunities for Prodways Group and DBT SA
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Prodways and DBT is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Prodways Group SA and DBT SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBT SA and Prodways Group 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 Prodways Group SA are associated (or correlated) with DBT SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBT SA has no effect on the direction of Prodways Group i.e., Prodways Group and DBT SA go up and down completely randomly.
Pair Corralation between Prodways Group and DBT SA
Assuming the 90 days trading horizon Prodways Group SA is expected to generate 0.45 times more return on investment than DBT SA. However, Prodways Group SA is 2.2 times less risky than DBT SA. It trades about -0.05 of its potential returns per unit of risk. DBT SA is currently generating about -0.1 per unit of risk. If you would invest 52.00 in Prodways Group SA on August 30, 2024 and sell it today you would lose (4.00) from holding Prodways Group SA or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prodways Group SA vs. DBT SA
Performance |
| Timeline |
| Prodways Group SA |
| DBT SA |
Prodways Group and DBT SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prodways Group and DBT SA
The main advantage of trading using opposite Prodways Group and DBT SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prodways Group position performs unexpectedly, DBT SA 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 DBT SA will offset losses from the drop in DBT SA's long position.| Prodways Group vs. Balyo SA | Prodways Group vs. Lumibird SA | Prodways Group vs. Chargeurs SA | Prodways Group vs. Figeac Aero SA |
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.
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