Correlation Between Dataproces Group and DecideAct

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

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

Diversification Opportunities for Dataproces Group and DecideAct

-0.73

Correlation Coefficient

Dataproces Group  DecideAct

Pay attention - limited upside

The 3 months correlation between Dataproces and DecideAct is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Dataproces Group AS and DecideAct AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DecideAct AS and Dataproces Group 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 Dataproces Group AS are associated (or correlated) with DecideAct. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DecideAct AS has no effect on the direction of Dataproces Group i.e., Dataproces Group and DecideAct go up and down completely randomly.

Pair Corralation between Dataproces Group and DecideAct

Assuming the 90 days trading horizon Dataproces Group AS is expected to generate 0.45 times more return on investment than DecideAct. However, Dataproces Group AS is 2.22 times less risky than DecideAct. It trades about 0.09 of its potential returns per unit of risk. DecideAct AS is currently generating about 0.02 per unit of risk. If you would invest  168.00  in Dataproces Group AS on September 13, 2024 and sell it today you would earn a total of  412.00  from holding Dataproces Group AS or generate 245.24% return on investment over 90 days.

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

Dataproces Group AS  vs.  DecideAct AS

Dataproces Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dataproces Group AS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Dataproces Group displayed solid returns over the last few months and may actually be approaching a breakup point.

DecideAct AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DecideAct AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Dataproces Group and DecideAct

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

The idea behind Dataproces Group AS and DecideAct 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.