Correlation Between Data Modul and COMPUTERSHARE

Can any of the company-specific risk be diversified away by investing in both Data Modul and COMPUTERSHARE 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 COMPUTERSHARE 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 COMPUTERSHARE, you can compare the effects of market volatilities on Data Modul and COMPUTERSHARE 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 COMPUTERSHARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Data Modul and COMPUTERSHARE.

Diversification Opportunities for Data Modul and COMPUTERSHARE

-0.38

Correlation Coefficient

Data Modul  COMPUTERSHARE

Very good diversification

The 3 months correlation between Data and COMPUTERSHARE is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Data Modul AG and COMPUTERSHARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMPUTERSHARE 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 COMPUTERSHARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMPUTERSHARE has no effect on the direction of Data Modul i.e., Data Modul and COMPUTERSHARE go up and down completely randomly.

Pair Corralation between Data Modul and COMPUTERSHARE

Assuming the 90 days trading horizon Data Modul AG is expected to under-perform the COMPUTERSHARE. In addition to that, Data Modul is 1.16 times more volatile than COMPUTERSHARE. It trades about -0.08 of its total potential returns per unit of risk. COMPUTERSHARE is currently generating about 0.24 per unit of volatility. If you would invest  1,600  in COMPUTERSHARE on October 25, 2024 and sell it today you would earn a total of  440.00  from holding COMPUTERSHARE or generate 27.5% return on investment over 90 days.

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

Data Modul AG  vs.  COMPUTERSHARE

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 fragile 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.

COMPUTERSHARE

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in COMPUTERSHARE are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical indicators, COMPUTERSHARE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Data Modul and COMPUTERSHARE

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

The idea behind Data Modul AG and COMPUTERSHARE 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.