Correlation Between Dometic Group and Unibap AB
Can any of the company-specific risk be diversified away by investing in both Dometic Group and Unibap 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 Unibap 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 Unibap AB, you can compare the effects of market volatilities on Dometic Group and Unibap 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 Unibap AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dometic Group and Unibap AB.
Diversification Opportunities for Dometic Group and Unibap AB
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dometic and Unibap is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Dometic Group AB and Unibap AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unibap 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 Unibap AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unibap AB has no effect on the direction of Dometic Group i.e., Dometic Group and Unibap AB go up and down completely randomly.
Pair Corralation between Dometic Group and Unibap AB
Assuming the 90 days trading horizon Dometic Group AB is expected to under-perform the Unibap AB. But the stock apears to be less risky and, when comparing its historical volatility, Dometic Group AB is 1.26 times less risky than Unibap AB. The stock trades about -0.17 of its potential returns per unit of risk. The Unibap AB is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 360.00 in Unibap AB on September 26, 2024 and sell it today you would earn a total of 18.00 from holding Unibap AB or generate 5.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Dometic Group AB vs. Unibap AB
Performance |
Timeline |
Dometic Group AB |
Unibap AB |
Dometic Group and Unibap AB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dometic Group and Unibap AB
The main advantage of trading using opposite Dometic Group and Unibap AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dometic Group position performs unexpectedly, Unibap 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 Unibap AB will offset losses from the drop in Unibap AB's long position.Dometic Group vs. AB SKF | Dometic Group vs. Tele2 AB | Dometic Group vs. Sandvik AB | Dometic Group vs. Skanska 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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