Correlation Between DLSI and Synergie

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

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

Diversification Opportunities for DLSI and Synergie

0.34

Correlation Coefficient

DLSI  Synergie

Weak diversification

The 3 months correlation between DLSI and Synergie is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding DLSI and Synergie SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synergie SE and DLSI 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 DLSI are associated (or correlated) with Synergie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synergie SE has no effect on the direction of DLSI i.e., DLSI and Synergie go up and down completely randomly.

Pair Corralation between DLSI and Synergie

Assuming the 90 days trading horizon DLSI is expected to generate 1.0 times more return on investment than Synergie. However, DLSI is 1.0 times less risky than Synergie. It trades about 0.0 of its potential returns per unit of risk. Synergie SE is currently generating about -0.01 per unit of risk. If you would invest  1,217  in DLSI on September 14, 2024 and sell it today you would lose (17.00) from holding DLSI or give up 1.4% of portfolio value over 90 days.

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

DLSI  vs.  Synergie SE

DLSI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DLSI has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Synergie SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Synergie SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with DLSI and Synergie

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

The idea behind DLSI and Synergie SE 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 Commodity Directory module to find actively traded commodities issued by global exchanges.