Correlation Between Dataproces Group and TROPHY GAMES

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

Diversification Opportunities for Dataproces Group and TROPHY GAMES

-0.42

Correlation Coefficient

Dataproces Group  TROPHY GAMES

Very good diversification

The 3 months correlation between Dataproces and TROPHY is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Dataproces Group AS and TROPHY GAMES Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TROPHY GAMES Development 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 TROPHY GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TROPHY GAMES Development has no effect on the direction of Dataproces Group i.e., Dataproces Group and TROPHY GAMES go up and down completely randomly.

Pair Corralation between Dataproces Group and TROPHY GAMES

Assuming the 90 days trading horizon Dataproces Group AS is expected to generate 0.81 times more return on investment than TROPHY GAMES. However, Dataproces Group AS is 1.23 times less risky than TROPHY GAMES. It trades about 0.05 of its potential returns per unit of risk. TROPHY GAMES Development is currently generating about 0.0 per unit of risk. If you would invest  505.00  in Dataproces Group AS on October 7, 2024 and sell it today you would earn a total of  75.00  from holding Dataproces Group AS or generate 14.85% return on investment over 90 days.

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

Dataproces Group AS  vs.  TROPHY GAMES Development

Dataproces Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dataproces Group AS are ranked lower than 6 (%) 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.

TROPHY GAMES Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TROPHY GAMES Development has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Dataproces Group and TROPHY GAMES

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

The idea behind Dataproces Group AS and TROPHY GAMES Development 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.