Correlation Between Data Modul and Strer SE

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

Diversification Opportunities for Data Modul and Strer SE

-0.21

Correlation Coefficient

Data Modul  Strer SE

Very good diversification

The 3 months correlation between Data and Strer is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Data Modul AG and Strer SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strer SE 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 Strer SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strer SE has no effect on the direction of Data Modul i.e., Data Modul and Strer SE go up and down completely randomly.

Pair Corralation between Data Modul and Strer SE

Assuming the 90 days trading horizon Data Modul AG is expected to under-perform the Strer SE. But the stock apears to be less risky and, when comparing its historical volatility, Data Modul AG is 1.64 times less risky than Strer SE. The stock trades about -0.09 of its potential returns per unit of risk. The Strer SE Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  4,670  in Strer SE Co on October 26, 2024 and sell it today you would earn a total of  940.00  from holding Strer SE Co or generate 20.13% 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.  Strer SE Co

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.

Strer SE

Risk-Adjusted Performance

1 of 100

Very Weak

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

Pair Trading with Data Modul and Strer SE

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

The idea behind Data Modul AG and Strer SE Co 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.