Correlation Between Datagroup and Tritax EuroBox

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

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

Diversification Opportunities for Datagroup and Tritax EuroBox

-0.56

Correlation Coefficient

Datagroup  Tritax EuroBox

Excellent diversification

The 3 months correlation between Datagroup and Tritax is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Datagroup SE and Tritax EuroBox PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tritax EuroBox PLC and Datagroup 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 Datagroup SE are associated (or correlated) with Tritax EuroBox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tritax EuroBox PLC has no effect on the direction of Datagroup i.e., Datagroup and Tritax EuroBox go up and down completely randomly.

Pair Corralation between Datagroup and Tritax EuroBox

Assuming the 90 days trading horizon Datagroup SE is expected to generate 2.85 times more return on investment than Tritax EuroBox. However, Datagroup is 2.85 times more volatile than Tritax EuroBox PLC. It trades about 0.04 of its potential returns per unit of risk. Tritax EuroBox PLC is currently generating about -0.05 per unit of risk. If you would invest  4,330  in Datagroup SE on October 10, 2024 and sell it today you would earn a total of  215.00  from holding Datagroup SE or generate 4.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	73.77%
Values	Daily Returns

Datagroup SE  vs.  Tritax EuroBox PLC

Datagroup SE

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Datagroup SE are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Datagroup may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Tritax EuroBox PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tritax EuroBox PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Tritax EuroBox is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Datagroup and Tritax EuroBox

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

The idea behind Datagroup SE and Tritax EuroBox PLC 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.