Correlation Between Dampskibsselskabet and Roblon AS

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

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

Diversification Opportunities for Dampskibsselskabet and Roblon AS

-0.11

Correlation Coefficient

Dampskibsselskabet  Roblon AS

Good diversification

The 3 months correlation between Dampskibsselskabet and Roblon is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Dampskibsselskabet Norden AS and Roblon AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roblon AS and Dampskibsselskabet 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 Dampskibsselskabet Norden AS are associated (or correlated) with Roblon AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roblon AS has no effect on the direction of Dampskibsselskabet i.e., Dampskibsselskabet and Roblon AS go up and down completely randomly.

Pair Corralation between Dampskibsselskabet and Roblon AS

Assuming the 90 days trading horizon Dampskibsselskabet Norden AS is expected to generate 1.39 times more return on investment than Roblon AS. However, Dampskibsselskabet is 1.39 times more volatile than Roblon AS. It trades about -0.02 of its potential returns per unit of risk. Roblon AS is currently generating about -0.04 per unit of risk. If you would invest  30,091  in Dampskibsselskabet Norden AS on October 12, 2024 and sell it today you would lose (8,491) from holding Dampskibsselskabet Norden AS or give up 28.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Dampskibsselskabet Norden AS  vs.  Roblon AS

Dampskibsselskabet

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dampskibsselskabet Norden AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Roblon AS

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Roblon AS are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating essential indicators, Roblon AS sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dampskibsselskabet and Roblon AS

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

The idea behind Dampskibsselskabet Norden AS and Roblon 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.