Correlation Between DATAGROUP and AlzChem Group

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

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

Diversification Opportunities for DATAGROUP and AlzChem Group

0.35

Correlation Coefficient

DATAGROUP  AlzChem Group

Weak diversification

The 3 months correlation between DATAGROUP and AlzChem is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding DATAGROUP SE and AlzChem Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AlzChem Group AG 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 AlzChem Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AlzChem Group AG has no effect on the direction of DATAGROUP i.e., DATAGROUP and AlzChem Group go up and down completely randomly.

Pair Corralation between DATAGROUP and AlzChem Group

Assuming the 90 days trading horizon DATAGROUP SE is expected to under-perform the AlzChem Group. But the stock apears to be less risky and, when comparing its historical volatility, DATAGROUP SE is 1.53 times less risky than AlzChem Group. The stock trades about -0.24 of its potential returns per unit of risk. The AlzChem Group AG is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  5,660  in AlzChem Group AG on October 25, 2024 and sell it today you would earn a total of  380.00  from holding AlzChem Group AG or generate 6.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.44%
Values	Daily Returns

DATAGROUP SE  vs.  AlzChem Group AG

DATAGROUP SE

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DATAGROUP SE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical indicators, DATAGROUP is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

AlzChem Group AG

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AlzChem Group AG are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, AlzChem Group may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with DATAGROUP and AlzChem Group

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

The idea behind DATAGROUP SE and AlzChem Group AG 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.