Correlation Between AB SKF and DMG Mori
Can any of the company-specific risk be diversified away by investing in both AB SKF and DMG Mori 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 AB SKF and DMG Mori into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB SKF and DMG Mori Co, you can compare the effects of market volatilities on AB SKF and DMG Mori 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 AB SKF with a short position of DMG Mori. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB SKF and DMG Mori.
Diversification Opportunities for AB SKF and DMG Mori
Excellent diversification
The 3 months correlation between SKFA and DMG is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding AB SKF and DMG Mori Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DMG Mori and AB SKF 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 AB SKF are associated (or correlated) with DMG Mori. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DMG Mori has no effect on the direction of AB SKF i.e., AB SKF and DMG Mori go up and down completely randomly.
Pair Corralation between AB SKF and DMG Mori
Assuming the 90 days trading horizon AB SKF is expected to generate 1.33 times more return on investment than DMG Mori. However, AB SKF is 1.33 times more volatile than DMG Mori Co. It trades about 0.06 of its potential returns per unit of risk. DMG Mori Co is currently generating about 0.01 per unit of risk. If you would invest 975.00 in AB SKF on August 31, 2024 and sell it today you would earn a total of 775.00 from holding AB SKF or generate 79.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AB SKF vs. DMG Mori Co
Performance |
| Timeline |
| AB SKF |
| DMG Mori |
AB SKF and DMG Mori Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB SKF and DMG Mori
The main advantage of trading using opposite AB SKF and DMG Mori positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB SKF position performs unexpectedly, DMG Mori 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 DMG Mori will offset losses from the drop in DMG Mori's long position.| AB SKF vs. Strategic Education | AB SKF vs. DEVRY EDUCATION GRP | AB SKF vs. Mobilezone Holding AG | AB SKF vs. Charter Communications |
| DMG Mori vs. Hyster Yale Materials Handling | DMG Mori vs. NEWELL RUBBERMAID | DMG Mori vs. Eagle Materials | DMG Mori vs. APPLIED MATERIALS |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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