Correlation Between Dataproces Group and BankInvest Optima

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

By analyzing existing cross correlation between Dataproces Group AS and BankInvest Optima 30, you can compare the effects of market volatilities on Dataproces Group and BankInvest Optima 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 Dataproces Group with a short position of BankInvest Optima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dataproces Group and BankInvest Optima.

Diversification Opportunities for Dataproces Group and BankInvest Optima

-0.65

Correlation Coefficient

Dataproces Group  BankInvest Optima

Excellent diversification

The 3 months correlation between Dataproces and BankInvest is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Dataproces Group AS and BankInvest Optima 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Optima and Dataproces Group 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 Dataproces Group AS are associated (or correlated) with BankInvest Optima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Optima has no effect on the direction of Dataproces Group i.e., Dataproces Group and BankInvest Optima go up and down completely randomly.

Pair Corralation between Dataproces Group and BankInvest Optima

Assuming the 90 days trading horizon Dataproces Group AS is expected to generate 4.56 times more return on investment than BankInvest Optima. However, Dataproces Group is 4.56 times more volatile than BankInvest Optima 30. It trades about 0.3 of its potential returns per unit of risk. BankInvest Optima 30 is currently generating about -0.17 per unit of risk. If you would invest  590.00  in Dataproces Group AS on December 27, 2024 and sell it today you would earn a total of  330.00  from holding Dataproces Group AS or generate 55.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	91.94%
Values	Daily Returns

Dataproces Group AS  vs.  BankInvest Optima 30

Dataproces Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dataproces Group AS are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Dataproces Group displayed solid returns over the last few months and may actually be approaching a breakup point.

BankInvest Optima

Risk-Adjusted Performance

Very Weak

Over the last 90 days BankInvest Optima 30 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, BankInvest Optima is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Dataproces Group and BankInvest Optima

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

The idea behind Dataproces Group AS and BankInvest Optima 30 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.