Correlation Between Dno ASA and Gentex

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Can any of the company-specific risk be diversified away by investing in both Dno ASA and Gentex 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 Dno ASA and Gentex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dno ASA and Gentex, you can compare the effects of market volatilities on Dno ASA and Gentex 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 Dno ASA with a short position of Gentex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dno ASA and Gentex.

Diversification Opportunities for Dno ASA and Gentex

DnoGentexDiversified AwayDnoGentexDiversified Away100%
0.4
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Dno and Gentex is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Dno ASA and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex and Dno ASA 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 Dno ASA are associated (or correlated) with Gentex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentex has no effect on the direction of Dno ASA i.e., Dno ASA and Gentex go up and down completely randomly.

Pair Corralation between Dno ASA and Gentex

Assuming the 90 days horizon Dno ASA is expected to generate 1.47 times more return on investment than Gentex. However, Dno ASA is 1.47 times more volatile than Gentex. It trades about 0.02 of its potential returns per unit of risk. Gentex is currently generating about 0.01 per unit of risk. If you would invest  1,180  in Dno ASA on October 13, 2024 and sell it today you would earn a total of  124.00  from holding Dno ASA or generate 10.51% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy99.8%
ValuesDaily Returns

Dno ASA  vs.  Gentex

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -50510
JavaScript chart by amCharts 3.21.15DNO GTX
       Timeline  
Dno ASA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Dno ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Dno ASA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan12.51313.514
Gentex 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Gentex has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Gentex is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan26.52727.52828.52929.5

Dno ASA and Gentex Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.39-4.79-3.18-1.580.01.563.174.786.48.01 0.050.100.15
JavaScript chart by amCharts 3.21.15DNO GTX
       Returns  

Pair Trading with Dno ASA and Gentex

The main advantage of trading using opposite Dno ASA and Gentex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dno ASA position performs unexpectedly, Gentex 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 Gentex will offset losses from the drop in Gentex's long position.
The idea behind Dno ASA and Gentex 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 CEOs Directory module to screen CEOs from public companies around the world.

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