Correlation Between Trelleborg and Dometic Group
Can any of the company-specific risk be diversified away by investing in both Trelleborg 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 Trelleborg and Dometic Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trelleborg AB and Dometic Group AB, you can compare the effects of market volatilities on Trelleborg 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 Trelleborg with a short position of Dometic Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trelleborg and Dometic Group.
Diversification Opportunities for Trelleborg and Dometic Group
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Trelleborg and Dometic is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Trelleborg 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 Trelleborg 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 Trelleborg 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 Trelleborg i.e., Trelleborg and Dometic Group go up and down completely randomly.
Pair Corralation between Trelleborg and Dometic Group
Assuming the 90 days trading horizon Trelleborg AB is expected to generate 0.63 times more return on investment than Dometic Group. However, Trelleborg AB is 1.59 times less risky than Dometic Group. It trades about -0.08 of its potential returns per unit of risk. Dometic Group AB is currently generating about -0.09 per unit of risk. If you would invest 36,820 in Trelleborg AB on August 28, 2024 and sell it today you would lose (1,080) from holding Trelleborg AB or give up 2.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Trelleborg AB vs. Dometic Group AB
Performance |
| Timeline |
| Trelleborg AB |
| Dometic Group AB |
Trelleborg and Dometic Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trelleborg and Dometic Group
The main advantage of trading using opposite Trelleborg and Dometic Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trelleborg 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.| Trelleborg vs. AB SKF | Trelleborg vs. Sandvik AB | Trelleborg vs. Alfa Laval AB | Trelleborg vs. Husqvarna AB |
| Dometic Group vs. Precise Biometrics AB | Dometic Group vs. Anoto Group AB | Dometic Group vs. Bong AB | Dometic Group vs. Episurf Medical 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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