Correlation Between DSV Panalpina and Geberit AG

Can any of the company-specific risk be diversified away by investing in both DSV Panalpina and Geberit AG 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 Geberit AG 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 Geberit AG ADR, you can compare the effects of market volatilities on DSV Panalpina and Geberit AG 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 Geberit AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSV Panalpina and Geberit AG.

Diversification Opportunities for DSV Panalpina and Geberit AG

-0.01

Correlation Coefficient

DSV Panalpina  Geberit AG

Good diversification

The 3 months correlation between DSV and Geberit is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding DSV Panalpina AS and Geberit AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geberit AG ADR 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 Geberit AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geberit AG ADR has no effect on the direction of DSV Panalpina i.e., DSV Panalpina and Geberit AG go up and down completely randomly.

Pair Corralation between DSV Panalpina and Geberit AG

Assuming the 90 days horizon DSV Panalpina AS is expected to generate 1.04 times more return on investment than Geberit AG. However, DSV Panalpina is 1.04 times more volatile than Geberit AG ADR. It trades about 0.07 of its potential returns per unit of risk. Geberit AG ADR is currently generating about -0.14 per unit of risk. If you would invest  10,192  in DSV Panalpina AS on October 1, 2024 and sell it today you would earn a total of  635.00  from holding DSV Panalpina AS or generate 6.23% return on investment over 90 days.

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

DSV Panalpina AS  vs.  Geberit AG ADR

DSV Panalpina AS

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DSV Panalpina AS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, DSV Panalpina may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Geberit AG ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Geberit AG ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with DSV Panalpina and Geberit AG

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

The idea behind DSV Panalpina AS and Geberit AG ADR 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.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.