Correlation Between DSV Panalpina and FOM Technologies

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

Diversification Opportunities for DSV Panalpina and FOM Technologies

0.57

Correlation Coefficient

DSV Panalpina  FOM Technologies

Very weak diversification

The 3 months correlation between DSV and FOM is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding DSV Panalpina AS and FOM Technologies AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOM Technologies 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 FOM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOM Technologies has no effect on the direction of DSV Panalpina i.e., DSV Panalpina and FOM Technologies go up and down completely randomly.

Pair Corralation between DSV Panalpina and FOM Technologies

Assuming the 90 days trading horizon DSV Panalpina AS is expected to under-perform the FOM Technologies. But the stock apears to be less risky and, when comparing its historical volatility, DSV Panalpina AS is 3.11 times less risky than FOM Technologies. The stock trades about -0.14 of its potential returns per unit of risk. The FOM Technologies AS is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  830.00  in FOM Technologies AS on December 27, 2024 and sell it today you would earn a total of  40.00  from holding FOM Technologies AS or generate 4.82% 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.  FOM Technologies AS

DSV Panalpina AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days DSV Panalpina AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

FOM Technologies

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FOM Technologies AS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, FOM Technologies may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with DSV Panalpina and FOM Technologies

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

The idea behind DSV Panalpina AS and FOM Technologies 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.