Correlation Between Dmc Global and Expro Group

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

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

Diversification Opportunities for Dmc Global and Expro Group

0.92

Correlation Coefficient

Dmc Global  Expro Group

Almost no diversification

The 3 months correlation between Dmc and Expro is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Dmc Global and Expro Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expro Group Holdings and Dmc Global 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 Dmc Global are associated (or correlated) with Expro Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expro Group Holdings has no effect on the direction of Dmc Global i.e., Dmc Global and Expro Group go up and down completely randomly.

Pair Corralation between Dmc Global and Expro Group

Given the investment horizon of 90 days Dmc Global is expected to generate 1.02 times more return on investment than Expro Group. However, Dmc Global is 1.02 times more volatile than Expro Group Holdings. It trades about -0.12 of its potential returns per unit of risk. Expro Group Holdings is currently generating about -0.31 per unit of risk. If you would invest  740.00  in Dmc Global on September 23, 2024 and sell it today you would lose (56.00) from holding Dmc Global or give up 7.57% of portfolio value over 90 days.

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

Dmc Global  vs.  Expro Group Holdings

Dmc Global

Risk-Adjusted Performance

0 of 100

Very Weak

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

Expro Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Expro Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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.

Pair Trading with Dmc Global and Expro Group

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

The idea behind Dmc Global and Expro Group Holdings 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.