Correlation Between DCM Financial and HEG
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By analyzing existing cross correlation between DCM Financial Services and HEG Limited, you can compare the effects of market volatilities on DCM Financial and HEG 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 DCM Financial with a short position of HEG. Check out your portfolio center. Please also check ongoing floating volatility patterns of DCM Financial and HEG.
Diversification Opportunities for DCM Financial and HEG
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DCM and HEG is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding DCM Financial Services and HEG Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEG Limited and DCM Financial 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 DCM Financial Services are associated (or correlated) with HEG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEG Limited has no effect on the direction of DCM Financial i.e., DCM Financial and HEG go up and down completely randomly.
Pair Corralation between DCM Financial and HEG
Assuming the 90 days trading horizon DCM Financial is expected to generate 22.81 times less return on investment than HEG. But when comparing it to its historical volatility, DCM Financial Services is 27.54 times less risky than HEG. It trades about 0.1 of its potential returns per unit of risk. HEG Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 42,081 in HEG Limited on September 27, 2024 and sell it today you would earn a total of 11,014 from holding HEG Limited or generate 26.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.2% |
Values | Daily Returns |
DCM Financial Services vs. HEG Limited
Performance |
Timeline |
DCM Financial Services |
HEG Limited |
DCM Financial and HEG Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DCM Financial and HEG
The main advantage of trading using opposite DCM Financial and HEG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DCM Financial position performs unexpectedly, HEG 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 HEG will offset losses from the drop in HEG's long position.DCM Financial vs. Kingfa Science Technology | DCM Financial vs. Rico Auto Industries | DCM Financial vs. GACM Technologies Limited | DCM Financial vs. COSMO FIRST LIMITED |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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