Correlation Between European Residential and DGTL Holdings
Can any of the company-specific risk be diversified away by investing in both European Residential and DGTL Holdings 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 European Residential and DGTL Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Residential Real and DGTL Holdings, you can compare the effects of market volatilities on European Residential and DGTL Holdings 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 European Residential with a short position of DGTL Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Residential and DGTL Holdings.
Diversification Opportunities for European Residential and DGTL Holdings
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between European and DGTL is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding European Residential Real and DGTL Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DGTL Holdings and European Residential 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 European Residential Real are associated (or correlated) with DGTL Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DGTL Holdings has no effect on the direction of European Residential i.e., European Residential and DGTL Holdings go up and down completely randomly.
Pair Corralation between European Residential and DGTL Holdings
Assuming the 90 days trading horizon European Residential Real is expected to generate 0.7 times more return on investment than DGTL Holdings. However, European Residential Real is 1.43 times less risky than DGTL Holdings. It trades about 0.17 of its potential returns per unit of risk. DGTL Holdings is currently generating about -0.12 per unit of risk. If you would invest 293.00 in European Residential Real on September 12, 2024 and sell it today you would earn a total of 77.00 from holding European Residential Real or generate 26.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.44% |
Values | Daily Returns |
European Residential Real vs. DGTL Holdings
Performance |
Timeline |
European Residential Real |
DGTL Holdings |
European Residential and DGTL Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with European Residential and DGTL Holdings
The main advantage of trading using opposite European Residential and DGTL Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Residential position performs unexpectedly, DGTL Holdings 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 DGTL Holdings will offset losses from the drop in DGTL Holdings' long position.European Residential vs. BSR Real Estate | European Residential vs. Minto Apartment Real | European Residential vs. Nexus Real Estate | European Residential vs. Morguard North American |
DGTL Holdings vs. Primaris Retail RE | DGTL Holdings vs. US Financial 15 | DGTL Holdings vs. iA Financial | DGTL Holdings vs. Advent Wireless |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |