Correlation Between Dometic Group and Elekta AB

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

Diversification Opportunities for Dometic Group and Elekta AB

DometicElektaDiversified AwayDometicElektaDiversified Away100%
0.64
  Correlation Coefficient

Poor diversification

The 3 months correlation between Dometic and Elekta is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Dometic Group AB and Elekta AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elekta AB and Dometic Group 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 Dometic Group AB are associated (or correlated) with Elekta AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elekta AB has no effect on the direction of Dometic Group i.e., Dometic Group and Elekta AB go up and down completely randomly.

Pair Corralation between Dometic Group and Elekta AB

Assuming the 90 days trading horizon Dometic Group AB is expected to under-perform the Elekta AB. In addition to that, Dometic Group is 1.32 times more volatile than Elekta AB. It trades about -0.09 of its total potential returns per unit of risk. Elekta AB is currently generating about -0.02 per unit of volatility. If you would invest  6,530  in Elekta AB on September 14, 2024 and sell it today you would lose (195.00) from holding Elekta AB or give up 2.99% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy98.46%
ValuesDaily Returns

Dometic Group AB  vs.  Elekta AB

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -5051015
JavaScript chart by amCharts 3.21.15DOM EKTA-B
       Timeline  
Dometic Group AB 

Risk-Adjusted Performance

0 of 100

 
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Very Weak
Over the last 90 days Dometic Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec52545658606264
Elekta AB 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Elekta AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Elekta AB is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec586062646668707274

Dometic Group and Elekta AB Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.06-3.04-2.02-1.0-0.01550.921.852.783.71 0.040.060.080.100.12
JavaScript chart by amCharts 3.21.15DOM EKTA-B
       Returns  

Pair Trading with Dometic Group and Elekta AB

The main advantage of trading using opposite Dometic Group and Elekta AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dometic Group position performs unexpectedly, Elekta AB 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 Elekta AB will offset losses from the drop in Elekta AB's long position.
The idea behind Dometic Group AB and Elekta AB 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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