Correlation Between BankInvest Value and Dataproces Group

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

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

Diversification Opportunities for BankInvest Value and Dataproces Group

0.78

Correlation Coefficient

BankInvest Value  Dataproces Group

Poor diversification

The 3 months correlation between BankInvest and Dataproces is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding BankInvest Value Globale and Dataproces Group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dataproces Group and BankInvest Value 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 BankInvest Value Globale are associated (or correlated) with Dataproces Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dataproces Group has no effect on the direction of BankInvest Value i.e., BankInvest Value and Dataproces Group go up and down completely randomly.

Pair Corralation between BankInvest Value and Dataproces Group

Assuming the 90 days trading horizon BankInvest Value is expected to generate 1.64 times less return on investment than Dataproces Group. But when comparing it to its historical volatility, BankInvest Value Globale is 3.37 times less risky than Dataproces Group. It trades about 0.17 of its potential returns per unit of risk. Dataproces Group AS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  500.00  in Dataproces Group AS on September 3, 2024 and sell it today you would earn a total of  65.00  from holding Dataproces Group AS or generate 13.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	83.08%
Values	Daily Returns

BankInvest Value Globale  vs.  Dataproces Group AS

BankInvest Value Globale

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BankInvest Value Globale are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, BankInvest Value may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Dataproces Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dataproces Group AS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Dataproces Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BankInvest Value and Dataproces Group

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

The idea behind BankInvest Value Globale and Dataproces Group 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.