Correlation Between DSV Panalpina and DecideAct

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

Diversification Opportunities for DSV Panalpina and DecideAct

-0.6

Correlation Coefficient

DSV Panalpina  DecideAct

Excellent diversification

The 3 months correlation between DSV and DecideAct is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding DSV Panalpina AS and DecideAct AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DecideAct AS 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 DecideAct. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DecideAct AS has no effect on the direction of DSV Panalpina i.e., DSV Panalpina and DecideAct go up and down completely randomly.

Pair Corralation between DSV Panalpina and DecideAct

Assuming the 90 days trading horizon DSV Panalpina AS is expected to generate 0.13 times more return on investment than DecideAct. However, DSV Panalpina AS is 7.6 times less risky than DecideAct. It trades about 0.21 of its potential returns per unit of risk. DecideAct AS is currently generating about 0.02 per unit of risk. If you would invest  147,700  in DSV Panalpina AS on September 13, 2024 and sell it today you would earn a total of  6,300  from holding DSV Panalpina AS or generate 4.27% return on investment over 90 days.

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

DSV Panalpina AS  vs.  DecideAct AS

DSV Panalpina AS

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DSV Panalpina AS are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, DSV Panalpina may actually be approaching a critical reversion point that can send shares even higher in January 2025.

DecideAct AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DecideAct AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with DSV Panalpina and DecideAct

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

The idea behind DSV Panalpina AS and DecideAct AS 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.