Correlation Between Dino Polska and Triton Development

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

Diversification Opportunities for Dino Polska and Triton Development

DinoTritonDiversified AwayDinoTritonDiversified Away100%
-0.04
  Correlation Coefficient

Good diversification

The 3 months correlation between Dino and Triton is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dino Polska SA and Triton Development SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triton Development and Dino Polska 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 Dino Polska SA are associated (or correlated) with Triton Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triton Development has no effect on the direction of Dino Polska i.e., Dino Polska and Triton Development go up and down completely randomly.

Pair Corralation between Dino Polska and Triton Development

Assuming the 90 days trading horizon Dino Polska SA is expected to generate 0.58 times more return on investment than Triton Development. However, Dino Polska SA is 1.71 times less risky than Triton Development. It trades about 0.03 of its potential returns per unit of risk. Triton Development SA is currently generating about -0.01 per unit of risk. If you would invest  38,910  in Dino Polska SA on November 23, 2024 and sell it today you would earn a total of  9,200  from holding Dino Polska SA or generate 23.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

Dino Polska SA  vs.  Triton Development SA

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-1001020
JavaScript chart by amCharts 3.21.15DNP TRI
       Timeline  
Dino Polska SA 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Dino Polska SA are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Dino Polska reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb400420440460480500
Triton Development 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Triton Development SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Triton Development is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2.52.62.72.82.933.13.23.3

Dino Polska and Triton Development Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.87-3.64-2.42-1.20.01.332.684.035.38 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15DNP TRI
       Returns  

Pair Trading with Dino Polska and Triton Development

The main advantage of trading using opposite Dino Polska and Triton Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dino Polska position performs unexpectedly, Triton Development 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 Triton Development will offset losses from the drop in Triton Development's long position.
The idea behind Dino Polska SA and Triton Development SA 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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