Correlation Between Data Modul and 24SEVENOFFICE GROUP

Can any of the company-specific risk be diversified away by investing in both Data Modul and 24SEVENOFFICE 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 Data Modul and 24SEVENOFFICE GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Data Modul AG and 24SEVENOFFICE GROUP AB, you can compare the effects of market volatilities on Data Modul and 24SEVENOFFICE 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 Data Modul with a short position of 24SEVENOFFICE GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Data Modul and 24SEVENOFFICE GROUP.

Diversification Opportunities for Data Modul and 24SEVENOFFICE GROUP

0.18

Correlation Coefficient

Data Modul  24SEVENOFFICE GROUP

Average diversification

The 3 months correlation between Data and 24SEVENOFFICE is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Data Modul AG and 24SEVENOFFICE GROUP AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 24SEVENOFFICE GROUP and Data Modul 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 Data Modul AG are associated (or correlated) with 24SEVENOFFICE GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 24SEVENOFFICE GROUP has no effect on the direction of Data Modul i.e., Data Modul and 24SEVENOFFICE GROUP go up and down completely randomly.

Pair Corralation between Data Modul and 24SEVENOFFICE GROUP

Assuming the 90 days trading horizon Data Modul AG is expected to generate 0.33 times more return on investment than 24SEVENOFFICE GROUP. However, Data Modul AG is 3.02 times less risky than 24SEVENOFFICE GROUP. It trades about -0.05 of its potential returns per unit of risk. 24SEVENOFFICE GROUP AB is currently generating about -0.12 per unit of risk. If you would invest  2,600  in Data Modul AG on October 26, 2024 and sell it today you would lose (60.00) from holding Data Modul AG or give up 2.31% of portfolio value over 90 days.

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

Data Modul AG  vs.  24SEVENOFFICE GROUP AB

Data Modul AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Data Modul AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

24SEVENOFFICE GROUP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 24SEVENOFFICE GROUP AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Data Modul and 24SEVENOFFICE GROUP

The main advantage of trading using opposite Data Modul and 24SEVENOFFICE GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Data Modul position performs unexpectedly, 24SEVENOFFICE 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 24SEVENOFFICE GROUP will offset losses from the drop in 24SEVENOFFICE GROUP's long position.

The idea behind Data Modul AG and 24SEVENOFFICE GROUP AB 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.