Correlation Between Dometic Group and Elekta AB
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
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.46% |
Values | Daily Returns |
Dometic Group AB vs. Elekta AB
Performance |
Timeline |
Dometic Group AB |
Elekta AB |
Dometic Group and Elekta AB Volatility Contrast
Predicted Return Density |
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.Dometic Group vs. Thule Group AB | ||
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Check out your portfolio center.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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