Correlation Between Indutrade and Datalogic

Can any of the company-specific risk be diversified away by investing in both Indutrade and Datalogic 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 Indutrade and Datalogic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Indutrade AB and Datalogic, you can compare the effects of market volatilities on Indutrade and Datalogic 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 Indutrade with a short position of Datalogic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indutrade and Datalogic.

Diversification Opportunities for Indutrade and Datalogic

0.85

Correlation Coefficient

Indutrade  Datalogic

Very poor diversification

The 3 months correlation between Indutrade and Datalogic is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Indutrade AB and Datalogic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datalogic and Indutrade 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 Indutrade AB are associated (or correlated) with Datalogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datalogic has no effect on the direction of Indutrade i.e., Indutrade and Datalogic go up and down completely randomly.

Pair Corralation between Indutrade and Datalogic

Assuming the 90 days trading horizon Indutrade AB is expected to generate 1.02 times more return on investment than Datalogic. However, Indutrade is 1.02 times more volatile than Datalogic. It trades about -0.12 of its potential returns per unit of risk. Datalogic is currently generating about -0.24 per unit of risk. If you would invest  30,943  in Indutrade AB on September 21, 2024 and sell it today you would lose (3,313) from holding Indutrade AB or give up 10.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Indutrade AB  vs.  Datalogic

Indutrade AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Indutrade AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Datalogic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Datalogic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Indutrade and Datalogic

The main advantage of trading using opposite Indutrade and Datalogic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indutrade position performs unexpectedly, Datalogic 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 Datalogic will offset losses from the drop in Datalogic's long position.

The idea behind Indutrade AB and Datalogic 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.