Correlation Between Dataproces Group and PFA Invest

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

Diversification Opportunities for Dataproces Group and PFA Invest

0.57

Correlation Coefficient

Dataproces Group  PFA Invest

Very weak diversification

The 3 months correlation between Dataproces and PFA is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Dataproces Group AS and PFA Invest Kreditobligationer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PFA Invest Kreditobl 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 PFA Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PFA Invest Kreditobl has no effect on the direction of Dataproces Group i.e., Dataproces Group and PFA Invest go up and down completely randomly.

Pair Corralation between Dataproces Group and PFA Invest

Assuming the 90 days trading horizon Dataproces Group AS is expected to generate 25.13 times more return on investment than PFA Invest. However, Dataproces Group is 25.13 times more volatile than PFA Invest Kreditobligationer. It trades about 0.09 of its potential returns per unit of risk. PFA Invest Kreditobligationer is currently generating about 0.45 per unit of risk. If you would invest  510.00  in Dataproces Group AS on September 12, 2024 and sell it today you would earn a total of  70.00  from holding Dataproces Group AS or generate 13.73% return on investment over 90 days.

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

Dataproces Group AS  vs.  PFA Invest Kreditobligationer

Dataproces Group

Risk-Adjusted Performance

7 of 100

Modest

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.

PFA Invest Kreditobl

Risk-Adjusted Performance

35 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in PFA Invest Kreditobligationer are ranked lower than 35 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, PFA Invest is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dataproces Group and PFA Invest

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

The idea behind Dataproces Group AS and PFA Invest Kreditobligationer 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.