Correlation Between DFDS AS and Matas AS

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

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

Diversification Opportunities for DFDS AS and Matas AS

-0.46

Correlation Coefficient

DFDS AS  Matas AS

Very good diversification

The 3 months correlation between DFDS and Matas is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding DFDS AS and Matas AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matas AS and DFDS AS 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 DFDS AS are associated (or correlated) with Matas AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matas AS has no effect on the direction of DFDS AS i.e., DFDS AS and Matas AS go up and down completely randomly.

Pair Corralation between DFDS AS and Matas AS

Assuming the 90 days trading horizon DFDS AS is expected to under-perform the Matas AS. In addition to that, DFDS AS is 1.3 times more volatile than Matas AS. It trades about -0.13 of its total potential returns per unit of risk. Matas AS is currently generating about 0.08 per unit of volatility. If you would invest  12,160  in Matas AS on September 9, 2024 and sell it today you would earn a total of  900.00  from holding Matas AS or generate 7.4% return on investment over 90 days.

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

DFDS AS  vs.  Matas AS

DFDS AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DFDS AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating 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.

Matas AS

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Matas AS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Matas AS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with DFDS AS and Matas AS

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

The idea behind DFDS AS and Matas 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.