Correlation Between Dataproces Group and Impero AS

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

Diversification Opportunities for Dataproces Group and Impero AS

0.09

Correlation Coefficient

Dataproces Group  Impero AS

Significant diversification

The 3 months correlation between Dataproces and Impero is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Dataproces Group AS and Impero AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impero AS 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 Impero AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impero AS has no effect on the direction of Dataproces Group i.e., Dataproces Group and Impero AS go up and down completely randomly.

Pair Corralation between Dataproces Group and Impero AS

Assuming the 90 days trading horizon Dataproces Group is expected to generate 1.72 times less return on investment than Impero AS. But when comparing it to its historical volatility, Dataproces Group AS is 2.4 times less risky than Impero AS. It trades about 0.09 of its potential returns per unit of risk. Impero AS is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  500.00  in Impero AS on September 1, 2024 and sell it today you would earn a total of  75.00  from holding Impero AS or generate 15.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

Dataproces Group AS  vs.  Impero AS

Dataproces Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dataproces Group AS are ranked lower than 7 (%) 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.

Impero AS

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Impero AS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Impero AS sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dataproces Group and Impero AS

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

The idea behind Dataproces Group AS and Impero AS 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.