Correlation Between DFDS AS and ROCKWOOL International

Can any of the company-specific risk be diversified away by investing in both DFDS AS and ROCKWOOL International 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 DFDS AS and ROCKWOOL International into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for DFDS AS and ROCKWOOL International

-0.34

Correlation Coefficient

DFDS AS  ROCKWOOL International

Very good diversification

The 3 months correlation between DFDS and ROCKWOOL is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding DFDS AS and ROCKWOOL International AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROCKWOOL International and DFDS AS 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 DFDS AS are associated (or correlated) with ROCKWOOL International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROCKWOOL International has no effect on the direction of DFDS AS i.e., DFDS AS and ROCKWOOL International go up and down completely randomly.

Pair Corralation between DFDS AS and ROCKWOOL International

Assuming the 90 days trading horizon DFDS AS is expected to under-perform the ROCKWOOL International. In addition to that, DFDS AS is 1.27 times more volatile than ROCKWOOL International AS. It trades about -0.14 of its total potential returns per unit of risk. ROCKWOOL International AS is currently generating about 0.07 per unit of volatility. If you would invest  257,800  in ROCKWOOL International AS on December 2, 2024 and sell it today you would earn a total of  25,200  from holding ROCKWOOL International AS or generate 9.78% return on investment over 90 days.

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

DFDS AS  vs.  ROCKWOOL International AS

DFDS AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days DFDS AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

ROCKWOOL International

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ROCKWOOL International AS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental indicators, ROCKWOOL International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with DFDS AS and ROCKWOOL International

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

The idea behind DFDS AS and ROCKWOOL International 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.