Correlation Between Skjern Bank and Dataproces Group

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Can any of the company-specific risk be diversified away by investing in both Skjern Bank 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 Skjern Bank and Dataproces Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skjern Bank AS and Dataproces Group AS, you can compare the effects of market volatilities on Skjern Bank 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 Skjern Bank with a short position of Dataproces Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skjern Bank and Dataproces Group.

Diversification Opportunities for Skjern Bank and Dataproces Group

-0.8
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Skjern and Dataproces is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Skjern Bank 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 Skjern Bank 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 Skjern Bank 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 Skjern Bank i.e., Skjern Bank and Dataproces Group go up and down completely randomly.

Pair Corralation between Skjern Bank and Dataproces Group

Assuming the 90 days trading horizon Skjern Bank AS is expected to under-perform the Dataproces Group. But the stock apears to be less risky and, when comparing its historical volatility, Skjern Bank AS is 2.89 times less risky than Dataproces Group. The stock trades about -0.3 of its potential returns per unit of risk. The Dataproces Group AS is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  590.00  in Dataproces Group AS on August 29, 2024 and sell it today you would lose (25.00) from holding Dataproces Group AS or give up 4.24% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Skjern Bank AS  vs.  Dataproces Group AS

 Performance 
       Timeline  
Skjern Bank AS 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Skjern Bank AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.
Dataproces Group 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Dataproces Group AS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Dataproces Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Skjern Bank and Dataproces Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Skjern Bank and Dataproces Group

The main advantage of trading using opposite Skjern Bank and Dataproces Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skjern Bank 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 Skjern Bank 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.
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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