Correlation Between Dustin Group and Generic Sweden

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

By analyzing existing cross correlation between Dustin Group AB and Generic Sweden publ, you can compare the effects of market volatilities on Dustin Group and Generic Sweden 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 Dustin Group with a short position of Generic Sweden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dustin Group and Generic Sweden.

Diversification Opportunities for Dustin Group and Generic Sweden

-0.81

Correlation Coefficient

Dustin Group  Generic Sweden

Pay attention - limited upside

The 3 months correlation between Dustin and Generic is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Dustin Group AB and Generic Sweden publ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generic Sweden publ and Dustin 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 Dustin Group AB are associated (or correlated) with Generic Sweden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generic Sweden publ has no effect on the direction of Dustin Group i.e., Dustin Group and Generic Sweden go up and down completely randomly.

Pair Corralation between Dustin Group and Generic Sweden

Assuming the 90 days trading horizon Dustin Group AB is expected to under-perform the Generic Sweden. In addition to that, Dustin Group is 1.84 times more volatile than Generic Sweden publ. It trades about -0.3 of its total potential returns per unit of risk. Generic Sweden publ is currently generating about 0.13 per unit of volatility. If you would invest  4,370  in Generic Sweden publ on September 14, 2024 and sell it today you would earn a total of  690.00  from holding Generic Sweden publ or generate 15.79% return on investment over 90 days.

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

Dustin Group AB  vs.  Generic Sweden publ

Dustin Group AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dustin Group AB 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 comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Generic Sweden publ

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Generic Sweden publ are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Generic Sweden unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dustin Group and Generic Sweden

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

The idea behind Dustin Group AB and Generic Sweden publ 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.