Correlation Between DMCC SPECIALITY and Can Fin

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

By analyzing existing cross correlation between DMCC SPECIALITY CHEMICALS and Can Fin Homes, you can compare the effects of market volatilities on DMCC SPECIALITY and Can Fin 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 DMCC SPECIALITY with a short position of Can Fin. Check out your portfolio center. Please also check ongoing floating volatility patterns of DMCC SPECIALITY and Can Fin.

Diversification Opportunities for DMCC SPECIALITY and Can Fin

0.13

Correlation Coefficient

DMCC SPECIALITY  Can Fin

Average diversification

The 3 months correlation between DMCC and Can is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding DMCC SPECIALITY CHEMICALS and Can Fin Homes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Can Fin Homes and DMCC SPECIALITY 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 DMCC SPECIALITY CHEMICALS are associated (or correlated) with Can Fin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Can Fin Homes has no effect on the direction of DMCC SPECIALITY i.e., DMCC SPECIALITY and Can Fin go up and down completely randomly.

Pair Corralation between DMCC SPECIALITY and Can Fin

Assuming the 90 days trading horizon DMCC SPECIALITY CHEMICALS is expected to generate 2.09 times more return on investment than Can Fin. However, DMCC SPECIALITY is 2.09 times more volatile than Can Fin Homes. It trades about 0.07 of its potential returns per unit of risk. Can Fin Homes is currently generating about -0.25 per unit of risk. If you would invest  28,480  in DMCC SPECIALITY CHEMICALS on November 19, 2024 and sell it today you would earn a total of  4,005  from holding DMCC SPECIALITY CHEMICALS or generate 14.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

DMCC SPECIALITY CHEMICALS  vs.  Can Fin Homes

DMCC SPECIALITY CHEMICALS

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DMCC SPECIALITY CHEMICALS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, DMCC SPECIALITY unveiled solid returns over the last few months and may actually be approaching a breakup point.

Can Fin Homes

Risk-Adjusted Performance

Very Weak

Over the last 90 days Can Fin Homes has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with DMCC SPECIALITY and Can Fin

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

The idea behind DMCC SPECIALITY CHEMICALS and Can Fin Homes 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 Stocks Directory module to find actively traded stocks across global markets.