Correlation Between DATA Communications and Dexterra

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

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

Diversification Opportunities for DATA Communications and Dexterra

-0.28

Correlation Coefficient

DATA Communications  Dexterra

Very good diversification

The 3 months correlation between DATA and Dexterra is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding DATA Communications Management and Dexterra Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dexterra Group and DATA Communications 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 DATA Communications Management are associated (or correlated) with Dexterra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dexterra Group has no effect on the direction of DATA Communications i.e., DATA Communications and Dexterra go up and down completely randomly.

Pair Corralation between DATA Communications and Dexterra

Assuming the 90 days horizon DATA Communications Management is expected to under-perform the Dexterra. In addition to that, DATA Communications is 3.08 times more volatile than Dexterra Group. It trades about -0.1 of its total potential returns per unit of risk. Dexterra Group is currently generating about 0.12 per unit of volatility. If you would invest  468.00  in Dexterra Group on September 12, 2024 and sell it today you would earn a total of  56.00  from holding Dexterra Group or generate 11.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

DATA Communications Management  vs.  Dexterra Group

DATA Communications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DATA Communications Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Dexterra Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dexterra Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Dexterra may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with DATA Communications and Dexterra

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

The idea behind DATA Communications Management and Dexterra Group 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.