Correlation Between Djurslands Bank and Dataproces Group

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

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

Diversification Opportunities for Djurslands Bank and Dataproces Group

0.39

Correlation Coefficient

Djurslands Bank  Dataproces Group

Weak diversification

The 3 months correlation between Djurslands and Dataproces is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Djurslands Bank and Dataproces Group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dataproces Group and Djurslands Bank 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 Djurslands Bank are associated (or correlated) with Dataproces Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dataproces Group has no effect on the direction of Djurslands Bank i.e., Djurslands Bank and Dataproces Group go up and down completely randomly.

Pair Corralation between Djurslands Bank and Dataproces Group

Assuming the 90 days trading horizon Djurslands Bank is expected to generate 45.33 times less return on investment than Dataproces Group. But when comparing it to its historical volatility, Djurslands Bank is 3.08 times less risky than Dataproces Group. It trades about 0.0 of its potential returns per unit of risk. Dataproces Group AS is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  520.00  in Dataproces Group AS on September 5, 2024 and sell it today you would earn a total of  45.00  from holding Dataproces Group AS or generate 8.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Djurslands Bank  vs.  Dataproces Group AS

Djurslands Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Djurslands Bank has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Djurslands Bank is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Dataproces Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dataproces Group AS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Dataproces Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Djurslands Bank and Dataproces Group

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

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