Correlation Between DSV Panalpina and Addentax Group

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

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

Diversification Opportunities for DSV Panalpina and Addentax Group

0.53

Correlation Coefficient

DSV Panalpina  Addentax Group

Very weak diversification

The 3 months correlation between DSV and Addentax is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding DSV Panalpina AS and Addentax Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addentax Group Corp and DSV Panalpina 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 DSV Panalpina AS are associated (or correlated) with Addentax Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addentax Group Corp has no effect on the direction of DSV Panalpina i.e., DSV Panalpina and Addentax Group go up and down completely randomly.

Pair Corralation between DSV Panalpina and Addentax Group

Assuming the 90 days horizon DSV Panalpina AS is expected to generate 0.5 times more return on investment than Addentax Group. However, DSV Panalpina AS is 2.02 times less risky than Addentax Group. It trades about 0.04 of its potential returns per unit of risk. Addentax Group Corp is currently generating about 0.0 per unit of risk. If you would invest  17,149  in DSV Panalpina AS on October 6, 2024 and sell it today you would earn a total of  3,934  from holding DSV Panalpina AS or generate 22.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

DSV Panalpina AS  vs.  Addentax Group Corp

DSV Panalpina AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DSV Panalpina AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, DSV Panalpina is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Addentax Group Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Addentax Group Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Addentax Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DSV Panalpina and Addentax Group

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

The idea behind DSV Panalpina AS and Addentax Group Corp 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..