Correlation Between OCI NV and DGB Group
Can any of the company-specific risk be diversified away by investing in both OCI NV and DGB Group 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 OCI NV and DGB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OCI NV and DGB Group NV, you can compare the effects of market volatilities on OCI NV and DGB Group 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 OCI NV with a short position of DGB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of OCI NV and DGB Group.
Diversification Opportunities for OCI NV and DGB Group
Excellent diversification
The 3 months correlation between OCI and DGB is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding OCI NV and DGB Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DGB Group NV and OCI NV 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 OCI NV are associated (or correlated) with DGB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DGB Group NV has no effect on the direction of OCI NV i.e., OCI NV and DGB Group go up and down completely randomly.
Pair Corralation between OCI NV and DGB Group
Assuming the 90 days trading horizon OCI NV is expected to under-perform the DGB Group. But the stock apears to be less risky and, when comparing its historical volatility, OCI NV is 2.2 times less risky than DGB Group. The stock trades about -0.07 of its potential returns per unit of risk. The DGB Group NV is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 71.00 in DGB Group NV on September 24, 2024 and sell it today you would earn a total of 13.00 from holding DGB Group NV or generate 18.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
OCI NV vs. DGB Group NV
Performance |
Timeline |
OCI NV |
DGB Group NV |
OCI NV and DGB Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with OCI NV and DGB Group
The main advantage of trading using opposite OCI NV and DGB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OCI NV position performs unexpectedly, DGB Group 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 DGB Group will offset losses from the drop in DGB Group's long position.OCI NV vs. BE Semiconductor Industries | OCI NV vs. TKH Group NV | OCI NV vs. Aalberts Industries NV | OCI NV vs. ASM International NV |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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