Correlation Between Sectra AB and Dometic Group
Can any of the company-specific risk be diversified away by investing in both Sectra AB and Dometic 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 Sectra AB and Dometic Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sectra AB and Dometic Group AB, you can compare the effects of market volatilities on Sectra AB and Dometic 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 Sectra AB with a short position of Dometic Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sectra AB and Dometic Group.
Diversification Opportunities for Sectra AB and Dometic Group
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sectra and Dometic is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sectra AB and Dometic Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dometic Group AB and Sectra AB 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 Sectra AB are associated (or correlated) with Dometic Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dometic Group AB has no effect on the direction of Sectra AB i.e., Sectra AB and Dometic Group go up and down completely randomly.
Pair Corralation between Sectra AB and Dometic Group
Assuming the 90 days trading horizon Sectra AB is expected to under-perform the Dometic Group. But the stock apears to be less risky and, when comparing its historical volatility, Sectra AB is 1.46 times less risky than Dometic Group. The stock trades about -0.14 of its potential returns per unit of risk. The Dometic Group AB is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 5,255 in Dometic Group AB on November 5, 2024 and sell it today you would earn a total of 395.00 from holding Dometic Group AB or generate 7.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sectra AB vs. Dometic Group AB
Performance |
| Timeline |
| Sectra AB |
| Dometic Group AB |
Sectra AB and Dometic Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sectra AB and Dometic Group
The main advantage of trading using opposite Sectra AB and Dometic Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sectra AB position performs unexpectedly, Dometic 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 Dometic Group will offset losses from the drop in Dometic Group's long position.| Sectra AB vs. Vitrolife AB | Sectra AB vs. Beijer Ref AB | Sectra AB vs. Biotage AB | Sectra AB vs. CellaVision AB |
| Dometic Group vs. Thule Group AB | Dometic Group vs. Husqvarna AB | Dometic Group vs. Trelleborg AB | Dometic Group vs. Essity AB |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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